Background check

Verification of facts about a person, such as identity, education, employment, directorships, court records or sanctions, from independent sources.

Example

Confirming a founder's claimed degree with the awarding institution.

Important

What can be checked and with what consent depends on local law.

Related terms

• Reference check — A conversation with a customer, supplier, former employee or prior counterparty who has no stake in whether the transaction completes.
• Independent verification — Confirming a claim against a source that was not produced by, and has no stake in, the transaction - a bank statement, a public register, a counterparty, a regulator.

Lessons that explain it

• 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)

All 578 terms in the Investing glossary