Will Britain Keep Investing in a Sex Offender’s Venture Fund?

In 2012, police spotted London venture capitalist Stefan Glaenzer acting erratically on a subway platform. He was lurching around, high out of his mind, when he boarded a crowded train and rubbed his groin against a woman standing inside. After his arrest, Glaenzer, the multimillionaire former executive chairman of the online music service Last.fm Ltd., apologized and pleaded guilty to sexual assault, which put him on the U.K.’s sex offender registry.

Three years later, Glaenzer asked the taxpayer-funded British Business Bank Plc to invest in his venture firm, Passion Capital. The bank, which previously funded Glaenzer a year before his arrest, had been trying to nurture the country’s technology industry and decided that his successful business record outweighed the incident. With an investment of £17.5 million ($23.1 million today), the U.K. government became one of Passion’s biggest investors.