I'm glad they run the show without a VC.
Yes, the OP has valid points, but do you homework and make up your own mind.
Actually BFL reps have stated on many occasions that product development was funded by VC and that pre-order funds were not used for that purpose. I think you'd have to be pretty special to believe that a legit VC firm would watch BFL's antics over the course of the last year+ and not pull out, but that's what we've been told.
Which VC firm and how much did they put in?
(Must be public info.)
Well, It was claimed in their June 15 press release:
http://www.prweb.com/pdfdownload/9611889.pdfButterfly Labs Announces Next Generation ASIC Lineup Largest SHA256 Hardware Manufacturer Acquires Venture Capital Funding
...
Venture Capital Funding Acquired, Record Rate of First Quarter Growth
Butterfly Labs, the largest market provider of SHA-256 hardware, is now backed by private venture capital, and
looking forward to continuing its operations in what some have recently labeled the Silicon Prairie of the
Midwest.
Retail sales have continued to grow strongly, and with exponential month-to-month sales increases, the decision
to back BFL was made easily. Butterfly Labs has strong fundamentals indicative of the kind of rapid growth
company we support, the private equity group notes. Having made bold investments in new technology,
theyre poised to redefine the landscape for SHA-256 hash verification.
...
I
very, very strongly believe this to be an
outright lie or a misrepresentation*,
as would anyone with even the faintest knowledge of how professional VCs operate.
In one sentence I would summarise it thus: Venture Capital firms do DUE DILLIGENCE.
It is just about the very most important factor considered when investing in a nascent company.
*i.e. "Venture Capital" really means Sonny Vleisides personal piggy-bank,
the missing millions stolen from little old-ladies and
verifiably never recovered:
RESTITUTION:Pursuant to 18 U.S.C. § 3663A(c)(3), restitution is not ordered because (1) the number of identifiable victims is so large as to make restitution impracticable [3663A(c)(3)(A)]; and (2) determining complex issues of fact related to the cause or amount of the victim's losses would complicate or prolong the sentencing process to a degree that the need to provide restitution to any victim is outweighed by the burden on the sentencing process [3663A(c)(3)(B)].
Some of the money was spent on furthering the criminal activity.
Some of the money was paid out to victims in small-dollar checks that the co-schemers misrepresented to be lottery winnings.
The rest of the money was paid out to the co-schemers and others for their own use.
VLEISIDES and the other defendants did not buy any lottery tickets, and the vast majority of the victims lost the money they sent.
The total loss from the scheme is in excess of $19 million.
Victims of the scheme were directed to send their money to mail drops in Ireland, The Netherlands and other locations, where participants in the scheme returned the money to the United States. From domestic bank accounts controlled by Henry Walther and others, some of the money was sent back to victims who were told that they were receiving winnings, even though the winnings were far less than the amount of money sent in by victims. The rest of the money was either spent to further the scheme or to enrich the defendants. Investigators estimate that victims lost approximately $20 million during the scheme, which ran for more than 15 years until it was shut down by federal agents in July 2006.
The 23 counts in the indictment carry a maximum statutory penalty of 460 years in federal prison and fines of up to $8.75 million.