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Do investors check your credit score?

I know investors do background checks and all types of reference checking before making an investment. Wondering if that also includes checking your credit score?

8 Replies

Steve Simitzis
1
1
Steve Simitzis Advisor
Founder and CEO at Treat
Generally not. Many/most entrepreneurs have terrible credit. Some of them will run a background check on you, and significant events like bankruptcies will show up.
michael burack
1
0
michael burack Entrepreneur
president
You can bet that the angels, vc's and after will check everything..The only safe place is family and friends who know one's history...
Alf Poor
0
1
Alf Poor Entrepreneur
Chief Operating Officer at Global Data Sentinel
I am not aware of investors using credit scoring when they make investment decisions. For example, countries like Israel attract tremendous inbound VC investment and I believe (might be wrong) that country does not operate a credit score system. My point is this, if one country has such information available and another does not, and VCs invest in both, then logic would suggest the investment criteria they establish with their LPs for a given fund is not relying on this criteria for their investment decisions. It goes without saying, but if your credit score is already affected then a start-up life cycle isn't going to make life any easier for the next few years, indeed you can expect very lean times as you establish the company unless you are one of the very fortunate firms that attracts sizable investment.
Arthur Lipper
0
0
Arthur Lipper Entrepreneur
Chairman of British Far East Holdings Ltd.
As credit scores are seen as being indicative of both discipline and other characteristics of the individual you can assume they do.
Dane H. Madsen
0
0
Dane H. Madsen Entrepreneur • Advisor
CEO, SVP Business Development | Domestic & International, Product Marketing | Open to new connections
I have never had mine checked - you do have to sign a release for them to do it so you will know if they do. Expect them to verify your education - did you really graduate form Stanford or did you just enroll.
Tom DiClemente
1
0
Tom DiClemente Advisor
Management Consulting | Interim CEO/COO | Coach
As an entrepreneur, attracting equity funding in nine startups, I have never been asked to authorize having my credit score checked, nor ever provided my SSN to a VC, except in the case of credit financing through a community service lender. Of course, with banks or other debt financing you will also normally have your credit score checked. I have never taken the commercial or mezzanine financing route.

As a VC, I have never checked anyone's credit score.
Sandra Gomez
0
0
Sandra Gomez Entrepreneur
CEO at Lendpl
Makes me feel better especially when a lot of us risk everything for our startup
Arthur Lipper
0
1
Arthur Lipper Entrepreneur
Chairman of British Far East Holdings Ltd.
Depends on the importance of your position and with your approval.
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