Napster Suit Unnerves Venture Capitalists

from the not-good-for-anyone dept

Last week the music industry sued Napster’s VCs, Hummer Winblad for investing in the company. This is ridiculous on many fronts – but it’s certainly caught the attention of venture capitalists, who fear that if this is allowed, it could do great harm to the VC industry. There’s a huge question of whether or not investors are liable for what the companies they invest in do. As someone quoted in the article points out, does this mean individual investors are responsbile for what the companies they buy stock in do? Not mentioned in the article, but discussed in one of the few blogs out there run by venture capitalists is the question of what other lawsuits venture capitalists might face based on this. For example, if a VC invests in a semiconductor startup that is later determined to have infringed on Intel’s patents – are the VCs now liable as well?

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