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Life after Napster

As a venture capitalist, IP attorney and CEO, Hank Barry has seen a lot in more than three decades working in tech.

Hank Barry has come full circle: attorney, venture capitalist, chief executive, attorney.

But his career has seen far more twists than these titles might suggest.

For example, his foray into the entrepreneurial realm, vis-a-vis his role as a venture capitalist, landed him the role of interim CEO at Napster. In that position, he played a part in helping define the boundaries of the file-swapping, or peer-to-peer, industry.

The first leg of Barry's transitions came as a chief legal eagle for Wilson Sonsini Goodrich & Rosati during the 1990s, representing the likes of Global Village Communications, Liquid Audio and Upshot to signing aboard with VC firm Hummer Winblad Venture Partners in 1999 and serving as interim CEO for Hummer Winblad portfolio company Napster between 2000 to 2002.

Earlier this month, Barry came full circle when he joined Howard Rice Nemerovski Canady Falk & Rabkin as a director and member of its business department. As an attorney with Howard Rice, Barry will focus on intellectual property, commercial strategy and venture capital as it relates to high-growth companies.

Barry recently chatted with CNET News.com about his circuitous route and the lessons learned along the way.

Q: What prompted you to leave the VC world and re-enter law?
Barry: I continue to have a great relationship with Hummer Winblad and loved working there, but this seemed like the right thing to do.

I always loved practicing law, and Howard Rice has the scale to do complex matters, like RIM (PDF) and Charles Schwab, but also is small enough for the human factor. I think there's somewhere around 125 lawyers, so it seems like a good fit for me.

If you loved the law so much, why did you leave Wilson Sonsini after five years to join Hummer Winblad in 1999?
Barry: While I was at Wilson Sonsini, I did five IPOs in 1999 and was familiar with Hummer Winblad. I had known them for 10 years. The era we were in had lots of opportunities, and I wanted to know more about the financial aspects of companies and do an operating role.

It seems you got both at Napster. What are some of the key lessons learned while serving as interim CEO at Napster that can be applied to the companies you'll be representing at Howard Rice?
Barry: The No. 1 thing I have an appreciation for is how fast things move on the operations side. As lawyers, you're trained to reflect. But on the operations side of things, you don't have time. The marketscape map is changing on a daily basis. You don't come to appreciate it until you experience it. And that experience will make me a much better lawyer as a result.

I also have a better understanding of what is functionally important, rather than what is important in the abstract. One thing we did at Napster that I regret is having somewhere around 30 engineers to develop a filtering system. With all the delays we had, we could have had a smaller team and made more progress in the same amount of time.

Do you expect to do a lot of work representing peer-to-peer companies?
Barry: I think there are a lot of interesting possibilities out there. I think it is an architecture that is much better understood than when we were doing Napster. The good news is it's a very efficient transport mechanism, but that is all that it is--a transport mechanism. So companies try to build on top of that and then it kind of becomes an applications business. The interesting thing to see is what happens to P2P in mobile devices. Mash-ups are in essence P2P.

With the entrepreneurial experience you gained from running Napster, what consideration did you give to launching your own company?
Barry: I could, but Howard Rice is an entrepreneurial firm and very hands-on. I see this as an entrepreneurial opportunity. I have an operational role and will also be doing complex litigation and complex transactions.

When you were with Wilson Sonsini, did you work with start-ups on their term sheets that would be presented to the VCs? And when you went to Hummer Winblad, did it prove much of an eye-opener on the process those term sheets go through?
Barry: I see it from both sides now. I learned it's all about pattern matching. Once you work with a lot of companies, you see a lot of patterns.

A year after a company is funded, you often see a beef develop with the CEO. As the company grows, the founder's relationship with the VCs often changes. You see this on the side that's representing the companies and you see it on the VC side.

At Hummer Winblad, I learned about the VCs' decision-making process and the dynamics considered when determining what to invest in. I have a greater appreciation for the ecosystem, that relationship they have with institutional investors, corporate partners and the companies. I think people who have never been at VC firms don't realize how important these relationships are on a day-to-day basis.

I have a much better ability to match up which companies should go with which VC firms and which VC capitalists. You get to know who is interested in what and who would get along with whom.