venture-capital, budgetSo, I got curious reading this article on MSN about a venture capital backed company that got all the R&D done but ran out of money before they could begin production. This one in particular got $34 million in preorders but failed to deliver. The article also states that the company managed to refund all the preorders. My question is, if they ran out of money during the R&D phase, how could afford to shell out $34 mil in refunds? The more general question of course is, how could any company that “runs out of money” then afford to dole out massive refunds? Is a venture capital backed project different than say a kickstarter project wherein the funds raised are used for R&D?
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