Is BitTorrent Blowing Up?
Four-year-old BitTorrent -- whose free, open-source file-sharing applications are used by millions of people to distribute large software and media files -- looks to be in some pretty grave trouble. TechCrunch reported this morning that the company recently returned $17 million in funding that it had received last spring from Accel, DCM, and DAG Ventures. In a letter to shareholders, BitTorrent said that the move was made because it was “not gaining sufficient traction.” BitTorrent isn’t the first company to agree to unwind a funding, but it’s certainly not common, either. Foundry Group partner Jason Mendelson, a trained attorney who worked at Cooley Godward Kronish and then as general counsel for Mobius Venture Capital, tells me he’s only seen a “handful” of deals get undone in his career, saying that such dust-ups typically indicate that “this dog doesn’t hunt.” I chatted with Mendelson earlier today about how protected VCs are from companies that don't "gain sufficient traction." Read our conversation after the jump.
