Silicon Valley's venture capital (VC) community is withhold funding for promising new technologies because of concerns about entertainment industry lawsuits.
Hank Barry, former Napster chief executive and a partner with Hummer Winblad Venture Partners, said that his firm, which invested millions in the controversial file-swapping technology, is reluctant to fund technologies with the potential to violate intellectual property laws.
He told the Mercury News that a company whose technology could stream music over cellular phone networks was recently refused funding because the VC's felt that they could lose their money in a court room tussle with the music industry.
"In these very uncertain times, the investors do the prudent thing. They back away, and innovation loses out," said Barry.
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