[efuquen]

Grooveshark had a paltry amount of equity/debt financing compared to what's common in the valley. In total they raised a couple million, in the low to mid single digits. Part was equity and part debt financing, which was all paid back and some of the equity was also bought back from investors who wanted out after the lawsuits.

Grooveshark was completely self sufficient for a long time, even with the lawyer bills. What really killed it was the pressure from labels to get them kicked off ad networks, mobile app stores (first Apple, then Google), and prevent the more lucrative direct ad deals you need to really survive. Once the summary judgement occurred is when it really started becoming impossible.

Disclaimer I was an early employee that worked there for 5 years.