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We all spend a substantial amount of time trying to find the right candidates for our companies, whether it is a CEO or a developer. I often find that founders or their hiring managers do not review three simple areas to make sure that the candidate is an honest, law abiding citizen:

1. Background Checks--companies such as Applicant Insight  and Hire Right  can provide detailed information on criminal records, lawsuits, loan defaults, foreclosures, etc. on potential candidates, often in three days or less and for no more than a few hundred dollars. 
2. W-2's--you would be surprised at the number of applicant who are willing to "lie" to you about their true earnings, especially sales candidates.  Ask candidates for the last five years of W-2's to discern trends and problems.
3. Your Own References--any applicant is going to give you his best references.  I always ask a  candidate to join me on LinkedIn, then find  someone who worked with them in a prior company and call them to get a less biased view.  Also, I will ask mutual friends if they know people from a candidate's past so that I can speak with them about the applicant's performance.

These may be uncomfortable questions to ask candidates, but trust me, everyone is doing it these days. Don't be caught with a candidate who has fabricated a background and may not perform as promised in your start up.

Happy Fourth of July....