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was quick to the point: “1. We don’t respond to threats. 2. After discussing the situation, in detail, with Tim, our offer to resolve the matter has been withdrawn.” Improbably, John Fanning now urged escalation. “They called your bluff,” he wrote Amram. “Now we have to draft a complaint.” Napster was hardly in a position to initiate new lawsuits, and it didn’t, leaving the matter to fester for more than a year. Every time Napster closed new financing, it had to disclose the unpleasant experience with its first funder. While the dispute was never revealed to the public, gossip got enough circulation in the venture world that one enterprising investor later approached Draper Fisher and offered to buy Draper Atlantic’s right to invest. Lynch declined to discuss the experience beyond this statement: “We have an investment right in Napster. It may be the best investment we’ve ever made. It may be the worst. Either way, it may be the most noteworthy.”

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