Yeah. I interviewed with a startup at the beginning of this year and the Engineering Director was telling me how he brought his friends on-board like it was some sort of selling point. People he has known since high school. Hard pass.
I personally love the idea of recruiting friends and working alongside them. Obviously I could see this going both ways, but given that everyone is qualified I don't see the problem.
Given that friendships tend to last much longer than jobs I'd hazard a guess and say that most people would let the issue slide.
There's also the risk of cliques, concerns over unfairness in internal promotions and pay rises, and groupthink from being surrounded by like minded people to be worried about.
People that are competent are more enjoyable to work with, so there is a higher likelihood of us becoming friends.
Incompetent people are annoying and I don't become friends with them