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This is going to be one of those wonderful games of iterated group prisoner's dilemma, in which one member of a formerly functioning cartel has just publicly announced an intention to always play Defect.

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Could also be that the tea leaves (or winds) were reading (blowing) in this direction anyway and they decided to draw first blood in order to make the biggest splash.

True, but that also fits within the prisoners dilemma. The way the rewards are set up, you generally should defect if you think your opponent might defect. If it is an iterated prisoners dilemma and you think they will start defecting, you come out ahead if you beat them to it.

+1 for three metaphors in one sentence

Would that imply that, strategically, other investors might wish to avoid co-investing with Spark to punish their defection?

The thinking from Spark's side might be:

-Pay own legal fees, saves portfolio company money

-Better terms/relationships with investments attracts more, higher-quality startups

-Higher quality startups will likely be the big hits VCs need to be successful

-Attracting high quality startups forces other VCs to work with us on future and larger investment rounds

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