[nols]

I really think that it's not even a smokescreen as much as it's really what they think. "Why should I assume any risk when I'm just a reseller?" is a common thought among many new companies. They don't really see themselves as a business with its own risk as much as a subsidiary of the company.

It's just a sign of naiveté among many new entrepreneurs.

[spacemanmatt]

A necessary question: What value am I providing?

In their case, they dodged providing any at all.