I really don't know that there is a universal answer to your question. It would also likely depend on if you are raising true VC money, or angel money. In eit

I really don't know that there is a universal answer to your question. It would also likely depend on if you are raising true VC money, or angel money. In either case, you're talking about people (effectively) giving you money and trusting you to handle it well. Whenever money and emotions/biased decisions are involved, the outcome is not always predictable. You would likely need to figure out how to sell or position his credit situation to your investors. Did he run up a huge Visa debt by swiping his card at the local strip club, or did he try to bootstrap some small operation (or possibly his life) and end up with his debt too far ahead of his income? Does his credit situation evolve from continued wrong or bad decisions, or is it a one-time event? Different investors will also generally want varying degrees of control over the business funds. You might be able to find an arrangement where the funds are more like an escrow, where you have to get approval before making any commitments over $x,xxx. And lastly, the business idea itself probably plays into this. If you told me you had a Facebook app that was untouchable and allowed you to monetize Facebook's user base significantly, I would probably invest in your idea even if you were a drunken gambling addict. If your business idea is a Web2.0 virtual pet rock, well, then your personal credit issues don't really matter because no one is going to invest anyway :)