just screwed over his investors.

didn't break any laws,

To VCs, I would imagine the first is bigger disqualification than the second.

Startups are modeled around breaking laws to disrupt all the time. Ask for forgiveness than permission mentality.

Uber and Airbnb did it with taxi, breaking privacy laws in Europe by ad supported tech or fintech with AML/KYC securities law or more recently on copyright law to build their training data by ai companies . All of these depend on law being broken to succeed.

Calculating the risk of prosecution and the size of the penalty with upside of doing it anyway happens in these companies all the time.