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 read · Level 3

The point

The single reference question I find most revealing is 'what should this person be kept away from?'. Everyone has an answer, it gives the reference permission to be honest without being disloyal, and the answers across several people tend to converge on something true.

What is it?

Founders provide references who will speak well of them. Back-channel references are people the investor finds independently:

Former managers and colleagues People who reported to the founder Previous co-founders Investors in previous companies Customers and suppliers who worked with them

Good questions ask for specific examples:

What was it like to work for them when things went badly? What did they do when they disagreed with a decision above them? Would you work for or with them again? Why or why not? What should they be kept away from? Who else should I speak to?

Listen for patterns, not single comments. One critical reference may reflect a personal conflict. Three people independently describing the same behaviour is evidence.

Handle it carefully. Contacting people at the founder's current company or in ways that reveal a confidential fundraise can harm the founder. Many investors tell founders they will do back-channel references.

Why does an investor care?

Because the qualities that matter most - honesty under pressure, treatment of people, response to failure - are exactly what curated references are chosen to confirm and interviews are designed to show at their best.

People who reported to a founder often see behaviour that peers and managers do not.

Educational, not personalised financial advice. Nothing in the Investor Academy is a recommendation to buy, sell or hold anything — what is right for you depends on your own circumstances and the rules where you live.

Example

Six references.

Provided by founder (3): 'exceptional', 'driven', 'strategic' Back-channel (3): Former report: 'Brilliant, but took credit for the team's work' Former co-worker: 'Great with customers; hard on junior people' Previous investor: 'Very persuasive; updates became less frequent when things got difficult'

No single comment is disqualifying. Together they describe a founder who is compelling externally and less consistent with people and information under pressure. The investor asks the founder about their management style and about how they communicated with investors during their last difficult period.

The common mistake

Relying only on provided references, or overreacting to one negative comment without looking for a pattern.

How it works

Step 1: Find people who worked closely with the founder

Include people who reported to them, not only peers and managers.

Step 2: Ask for specific examples

Focus on behaviour under pressure and in disagreement.

Step 3: Look for patterns

Weight themes mentioned independently by several people.

Step 4: Protect confidentiality

Avoid contacts that could expose the founder or their fundraise inappropriately.

When to use this

Before investing, when a founder's judgement and behaviour are central to the decision.

When not to use it

Do not contact people in ways that breach confidentiality or put the founder's current role or relationships at risk.

How investors actually did it

A recurring pattern: investors describing reference practices

Venture investors frequently describe back-channel referencing as one of the most important parts of founder diligence in interviews and writing, and many say they place more weight on references from people who reported to a founder than on those from peers or supervisors.

Experienced investors look beyond the reference list, especially toward people with less power than the founder.

Do this now

Identify one person who reported to a founder you are evaluating
Write one reference question that asks for a specific example

Create a free account to read the rest and apply it to your own investing.

Related lessons

The customers you find yourself tell you more than the ones you are given — Customer calls are the most direct evidence of demand. They are most useful when they ask about past behaviour and include customers the company did not choose. (10 min)
References you chose tell you more than references you were given — Checking the people behind an investment means verifying claims, speaking to sources they did not nominate, and asking questions specific enough that a vague answer is itself informative. (11 min)
What you learn in one company is not yours to use in another — Investors see confidential information across companies. Handling conflicts, competitive overlap and confidential data properly protects founders, your reputation and your ability to keep investing. (10 min)