The VCs know this game from bitter experience. You have a great product. The dominant Operating System publisher (Microsoft / Red Hat) comes out with pretty much the same thing. You can't compete because the other guy is leveraging his OS dominance. No sense in funding you further - your toast.

They also had the problem of selling their annual contract. If they'd sold support "as needed" they would probably have done a lot better.

Their market research firm interviewed me and I told them I didn't think the annual would fly, but I'm sure they didn't even read the market research because they announced their product and pricing just a few days later.