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ern. Hardest hit by the news was Shawn’s mother, who broke down in tears. All of her dreams for Shawn had been bound up in his graduating college, something she had never done. “It was tough,” Coleen said. “I built this thing up about him going to college. He knew how disappointed I was.” She asked why he was the one who had to go, why it couldn’t be one of the other kids he was working with. But Shawn explained that if he didn’t do it now, and someone else came up with the idea, he would always regret not having pursued it. Coleen fought back her feelings and thought about what would be best for her son. “I told him he should go with his gut,” she said. Secretly, she was thinking, even hoping, that Napster would last six months or so. Then Shawn could come back and return to college.

John Fanning had a different reaction, one natural enough for an ambitious businessman with tens of thousands of dollars in debts: He saw his ticket to riches. As Shawn kept working on the system, Fanning told him he would help with the business end. Fanning drew up papers incorporating Napster Inc. At first, Shawn was pleased: It was a sign that his uncle believed in him, and that his project was becoming a reality. But then Fanning told Shawn that he would be getting only 30 percent of the company. John Fanning would keep the rest. Shawn was stunned. “Napster was his baby,” Loubani said. “It was completely do or die.” Fanning told Shawn that the company needed an experienced businessman like himself in charge, especially since when it came time to raise money, investors would want Napster controlled by a capable executive like himself. Besides, he said, when it came time to sell off part of the company to new investors, Fanning would sell some of his shares, reducing his percentage of the firm. Less emphasized was the obvious corollary: that Fanning would be the first to get money out of the project to which his nephew was devoting every waking hour.

It isn’t unusual for an inventor, even one who starts with 100 percent of a company’s ownership, to end up with 20 percent or less by the time of an initial public offering. Early investors and top executives are important to the process and often have equal stakes by that point. What is unusual, especially so early, is for more than half of a company to go to someone who is merely providing management expertise, even if he is world class—which Fanning clearly was not.

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