The company was not wasting money. I have worked in Silicon Valley startups with lavish spending. This was not one of them. There was no free food, no wine/beer on tap, no lavish parties, no free memberships to the equinox.
I won't name the company because to my shock (and frankly vast horror) they're still chugging along and I don't especially want to get sued but, a few years ago when I was still working for Red Gate, one of the leadership of a local company - also significantly hardware driven - came in and told their story to anyone who wanted to listen.
Over a period of maybe a decade or so, through successive rounds of funding, they'd managed to raise about half a billion and had produced... nothing commercially viable. Zilch. This guy's job in the company had been and continued to be to raise the necessary funding from investors, and I have to say he was clearly pretty damn good at separating fools from their money.
So imagine the situation: this guy comes in to a bootstrapped software company that had always been profitable and acts like he's really pleased with himself for raising half a billion dollars and pissing it up the wall because they'd gone all in over and over again with no clear product market fit. (N.B., it may have been pounds, but it was years ago and I can't remember, so let's call it dollars to keep it less dramatic.)
The reaction was quite hostile: I don't think we knew whether to be befuddled or enraged.
I mean you literally could get a better ROI by handing me $50M or $500M or whatever it is and standing by whilst I try to blow it all on cocaine and high-end hookers because there's just no way I can snort my way through that much coke in an entire lifetime without overdosing so you'd at least get some, and probably most, of your money back.
Don't get me wrong: I understand that VCs expect most ventures to fail, and to an extent that's perhaps reasonable, but surely there comes a point where you stop throwing good money after bad?
I'm wondering if the investment funds and startups provide enough transparency to the people whos money is actually invested to detect such schemes.