Passion Capital Co-Founder Resigns as Assault Rocks VC Firm

(Bloomberg) -- A convicted sex offender has stepped down as partner of the British venture-capital fund he helped create in a bid to ensure its survival.

A year after Stefan Glaenzer co-founded Passion Capital in 2011, he was arrested and convicted of assault on the London subway system. He has said he was severely impaired by cannabis during the incident, when he rubbed his groin against a female passenger. Last year, a Bloomberg Businessweek  story questioned whether the U.K. government would continue investing in Glaenzer's fund after heightened concerns around sexual misconduct by powerful people in technology.

At least one potential investor in Passion Capital declined to invest late last year after the investor's compliance department had flagged Glaenzer as a risk, he told TechCrunch, which reported on his departure earlier Thursday. Glaenzer decided to leave the firm so Passion Capital could focus on raising a new fund, its third. Representatives for the firm didn't immediately respond to requests for comment.

Glaenzer joins a long line of venture capitalists who were ousted over the last year after allegations of misconduct. They include Binary Capital's Justin Caldbeck, whose portfolio will now be partly managed by Lerer Hippeau, and Sherpa Capital's Shervin Pishevar, who stepped down after Bloomberg reported on multiple harassment claims.

Before starting Passion Capital, Glaenzer was chairman of streaming music site Last.fm. His fund quickly became one of Europe's highest-profile venture firms, winning backing from the U.K. government and others. Investors didn't let the assault stop them three years ago from giving Passion Capital 45 million pounds ($69 million), including 17.5 million pounds from the U.K. taxpayer-funded British Business Bank. Glaenzer told TechCrunch the ecosystem is “stunningly different” today.

To contact the author of this story: Sarah McBride in San Francisco at smcbride24@bloomberg.net.

To contact the editor responsible for this story: Mark Milian at mmilian@bloomberg.net, Andrew Pollack

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