Founder Due Diligence

Founder background, relationships between co-founders, references, incentives, previous ventures, commitment, integrity and leadership, checked rather than assumed.

The people decide most of the outcome

Lessons

• Verify the claims a founder's credibility rests on — Founder background checks confirm the specific facts that make a founder credible for this company - education, roles, prior companies and outcomes - using sources the founder did not provide. (9 min)
• The co-founder relationship is where many startups actually fail — Diligence on a founding team examines how the founders met, how long they have worked together, how they divide decisions, how they resolve disagreement and how they split equity. (10 min)
• The references you find yourself are the ones that matter — Back-channel references come from people who worked with a founder but were not suggested by them. Structured, careful conversations with them reveal patterns that curated references cannot. (10 min)
• Check what a founder stands to gain, and what else competes for their time — Founder incentives shape behaviour. Diligence looks at remaining ownership, salary, secondary sales, other roles and personal financial pressure to judge whether founders are motivated for the long journey ahead. (10 min)
• How a founder handled a failure tells you more than whether they failed — Previous startups, including failures, are strong evidence about a founder. Diligence looks at what happened, how investors, employees and customers were treated, and what the founder learned. (9 min)
• Consistency across conversations is the most practical integrity test — Integrity and leadership are hard to measure directly. Diligence looks at observable signals: whether numbers stay consistent, how bad news is delivered, how people are treated and how the founder responds to challenge. (10 min)

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