[mikeho1999]

All very good points... but one additional thing to add: what is his/her reputation with former co-workers / companies that s/he has worked with?

I had one co-founder who (we thought) had a very celebrated career at a very large (e.g. publicly traded) eCommerce-based company, making his way up to Sr. Director, etc. Considering we were starting similar type of company, it seemed like a perfect fit to bring him in as our chief executive.

However, we never asked for contacts / references with people he had worked with, VPs he worked under, etc.

When it came time to raising an institutional round, we were in due diligence with a VC that did look up those references, and it wasn't pretty. Turned out he had gotten fired by the company because he was using insider knowledge to basically try and start a competing company. Through his time there, he lost the trust of most of his co-workers and alienated everyone around him.

As our VC had then told us -- our CEO was a poison pill. Any VC we would talk to in the valley would have connections at this company, and would definitely follow up with their contacts at the company to find out more about our CEO, and every VC will come up with the same conclusion, that he is not to be trusted.

Had we known about all of this at the beginning (including how detrimental his relationships and his reputation has become), we would've never co-founded with him.

Definitely a tough lesson learned.

[avenger123]

This is highly relevant for any high-level hire, regardless of whether it's a startup or not.

In some ways, it's so much easier to bullshit now. LinkedIn definitely helps with this. Sometimes, the profiles with the most recommendations and glowing job descriptions are the most suspect to me.

Having worked with a few people that would be considered distrustful, conniving, etc. by the people around them and seeing their wonderful LinkedIn profiles makes me wonder about most of the profiles.

For people in the know, there's no gain in "exposing" the person unless they somehow cross paths and are asked an opinion. Even then, its a judgement call whether the truth needs to be said or not.

At the end of the day, it looks like the basics don't change. You still need to do real due diligence with the effort relative to how much damage the person can do if it doesn't workout.

The general business wisdom is that partnerships are bad and should not be done. I don't know why this seems to have changed for tech startups. I believe as in marriage, one should go into it with the possibility that it will fall apart. Knowing this possibility for a business partnership, two things should be considered. One, am I ok with this happening? Two, what are all the legal and contractual things I can do to get through it if it does happen.

If you are not ok with it, then don't partner up.

If you are OK with all going to crap since the perceived gain is so much higher, then by all means put together the best partnership agreement that you can that accounts for most of the possible scenarios.

[UK-AL]

Except most references are complete BS anyway. Normally good references are agreed upon before leave, regardless to if they were good employees or not.

Bad references are normally given because of political reasons(as good references are almost always given) not performance. I.E Employee exposed bad practices or made boss look bad, and a bad reference is used as retaliation.

I think there was some academic research that said references are the worst predictors for performance.

[PakG1]

This is the problem we're trying to fix with my startup socialcheck.me. We're trying to make a safe environment to give full picture comprehensive reference feedback by ensuring privacy and anonymity after verifying relationships are real via social networks. Then we make the data easy to analyze and compare. But admittedly, it's been difficult to figure out even then how to get people to trust that we keep the feedback private and anonymous the way kids trust Snapchat to really delete messages. Good reference checks are hard and broken (which is why we're trying to fix them).

[UK-AL]

Doesn't fix the problem of references being used for politcal retaliation, rather than actual performance. Which what the large chunk of bad references are about. In-fact it increases it, because the employee can no longer sue for retaliation, so the manager can make up anything he wants. Managers using references to retaliate against employees is fairly common.

This is why people are scared to whistle-blow. And businesses who value integrity miss out on good employees.

[PakG1]

Yeah, we try to compensate for that by increasing the data volume to balance out outlier feedback and identify whether something is a trend or not. But it's not easy.