Interesting Entrepreneur, Shady Past: Now What?

Earlier this week, I wrote about an entrepreneur with a fairly serious black mark on his record who has nevertheless received seed funding from some top-tier investors, including AOL president Tim Armstrong and Ron Conway. In an email, Conway told me that the entrepreneur, who was indicted for mail fraud in 2002, “has always been aboveboard about his full background” and that he'd “learned from his early mistakes.” The case raises the question -- one that I’m sure that all investors occasionally face -- of when to back someone with a somewhat dubious past, and when to run in the opposite direction.

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