[rexreed]

Talk about counting your chickens before they hatch ... and not just about the part where they moved or added a board member before the money hit the bank account, but even the little "celebration" in Vegas. How is raising money a reason to celebrate in Vegas... especially when it hasn't even hit the bank yet?

While I feel bad for the founders here and the VC behavior is deplorable, a little cautiousness and common sense would have really saved the day here. "Let's not move until the money is in the bank, ok? Hey board member -- just step back for a few minutes until the wire clears. Once it does, we're all yours."

... All that being said ..... BIG KUDOS to the team for getting the investors their money back:

"We sold the assets for what our original investors had put in to the company, about $1.5 million, so we were able to give them their money back."

That's great -- I know very few entrepreneurs who have gotten well past the point of raising capital who can claim to have returned investor money.

So, while you might have gotten the Big Screw by VCs, in part due to their shadyness and in part due to your own over-enthusiasm and lack of diligence, I think you saved the day for your investors. They may not invest with you again, but they can't say they lost money with you either.