The job of a VC partner is about trust, judgement, and persuasion. Flagrant violations by partners redound to the reputation of the whole firm. When you understand just what it is a VC firm is, how they're essentially middlemen simultaneously pitching themselves to operators and to capital, it becomes clear how important reputation is. Really, it's all there is. Without it, you can't do the job.

Do they implicitly respect the agency of others? Do they see people as individuals with their own goals and the fundamental right to decide what those goals are?

These people make a lot of decisions on behalf of others, and I believe that asking those questions isn't that far off from asking: can you trust them to act in the interests of their employees, clients, and customers? Or at the very least, are they likely to have some sense of fiduciary duty towards the people who they agree to perform work for?

So, from my perspective, "a private mistake which we all agree was not business-related" sounds...well I don't know the right word, but who is 'we' in that phrase?

And I don't know which institutional investor balked at the fund based on the perceived character of its decision-makers, but I appreciate that they considered that angle in their process.

Is this actually true? If, as a random example, a waiter in a restaurant were convicted of sexual assault on the subway (as in the story here), how would the owner of the restaurant even know about it to fire him?

I think things work exactly the opposite of how the author of this piece does. The person under question here had his career end because he was famous in his field. But 99% of people are not famous. Rather than "privilege" shielding him, being rich and famous was his downfall.