November 15, 2016
Chelsey Franks, CFE
Vice President - Investigations
You’ve likely heard many voices proclaim the value of screening your employees before you hire them, but what about the reverse – screening your employer before you join? In this age of startups and millennials flooding the workforce, this will become more and more of a necessity, particularly to prevent situations like what happened to the employees at WrkRiot.
As reported by The New York Times in August, the start-up WrkRiot recently unraveled after having been “Mired in internal chaos.” Among claims made by its former head of marketing, the firm “Sometimes paid employees in cashier’s checks before delaying payment altogether.”
The Times further reported that “Along with the start-up, [the Founder’s] personal credibility is on the line. As he built WrkRiot, the entrepreneur said that he graduated from the Stern School of Business at New York University and that he worked at J. P. Morgan for nearly four years as an analyst. N.Y.U. and J. P. Morgan both said they had no record of [him]. At least one company listed on his LinkedIn profile (which has since been scrubbed) also could not be found.”
These issues should immediately perk the ears of any investor or potential investor as evidence for why due diligence is so important, but people looking to join start-ups or new ventures should also take notice. As a former WrkRiot adviser who terminated his relationship with the company so poignantly wrote in a blog post, “I should have gotten to know the company and its leadership better before associating myself with them and lending them my credibility.”