I don't find it a cop-out at all.

A massive sales opportunity came up that could potentially allow them to bootstrap the service without further investment, or investment on better terms based on the increased revenue and growth from the sale. By the time they realized the sales opportunity wasn't going through the investors that were interested had gotten pushed back without reasonable growth to back up the push-back, and uncertainty of the major deal going through, which means the investors would have wanted more for their money then they wanted before. The situation would have then spiraled out more and more as time went on.

Such is why strategy and execution of these types of decisions is key for a startup to succeed.

Further, the way to convince someone to close is to give the credible threat of going with someone else: "If you like it then you should put a ring on it."

I agree with you. Many tales in startup-post-mortem say, "we ran out of money." The mods preface those with, "running out of money in only the proximal cause, that is, the immediate final event before shut-down. The real reasons are seldom only ' ran out of money'"

cop-out? more like a chicken and egg scenario. if they landed the deal the business would be less shaky and probably very viable, and they'd be able to land all the growth capital they wanted