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blad could boast of precious few IPOs. Of those, many were or soon would be below the IPO price. Liquid Audio had gone public at $15 and was headed down to $4. Pets.com, where Hummer had put in as much as $7.55 a share, was below $1. The Knot Inc., a wedding e-commerce site, was falling from a $10-a-share IPO to $3, and expense tracker Extensity Inc. had caromed from $20 to $823.50 and back to $19 in October. And those were winners, ones that sold stock to the public. The others included Gazoontite.com, a me-too allergy-drug seller that forced a $15 million write-off; eHow Inc., an advice site that went bankrupt; Home-Grocer.com Inc., which was bought by Webvan Group Inc., itself headed for bankruptcy; and Respond.com, best remembered for the free bottles of champagne it gave away at its launch party.

The dot-com shakeout aside, Hummer Winblad also demonstrated a remarkable tolerance for conflicts of interest, a recurring problem at VC firms that go so far as to mate one of their start-ups with another, à la Kleiner Perkins, Gigabeat, and Napster. (Kleiner also presided over the disastrous marriage of two of its biggest offspring, portal Excite Inc. and cable Internet-access firm @Home Inc.) After the Hummer Winblad takeover, Napster signed a pact with Liquid Audio when Kearby’s firm was coming up short one quarter. And Napster did little-noticed deals with two other Hummer Winblad firms as well, both at Barry’s insistence, according to senior Napster employees. Engineers from the first firm, Boston’s LavaStorm Inc., proved useful. At the second, it was a different story. Barry used $300,000 of Napster’s money as an up-front payment to struggling Mountain View, California-based start-up Envive Corp., which evaluated website performance. Core Napster staffers, including engineering VP Eddie Kessler, weren’t involved in picking Envive and never even learned that the money changed hands. Envive tried and failed to come up with a way it could assist Napster. “Eventually it just fell apart,” said Envive cofounder Joe Hsy. Hsy said his firm kept the money anyway: “They never asked for it back.” Even Napster’s office furniture was supplied by a Hummer-backed firm.

The Envive deal was like most VC-related conflicts of interest in that it got swept under the rug. Private firms have few disclosure requirements, and entrepreneurs are loath to sue VCs for fear they will never again get venture funding. But John Hummer never backed down from a

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