I respect and appreciate where your VCs are coming from, but look at it this way: I am a potential customer. I, as the operator of xyz company, am fully aware of the risks involved in searching for implementations outside the core code. One small mistake can lead to disastrous effects (see: gox).
I want to trust you and your platform, but I can't wholeheartedly. Without being able to audit your code I don't know if you haven't made a mistake in your implementation. And there is nothing you could really do to convince me otherwise without open sourcing it. You lost me as a customer, unfortunately.
The open source business model did not generate sufficient cash flow for expansion through support contracts.
We have some profitable projects like
https://bullionbitcoin.com,
http://bopshop.bitsofproof.com and
http://www.bitcointrezor.com/news/2014-02-10-mytrezor-bop-bitcoin-server and a few undisclosed that proved the value of the software, that I could trade in for meaningful expansion See:
http://www.iconcapitalsa.com/posts/8-icon-capital-reserve-s-a-acquires-leading-digital-currency-developer-bits-of-proof-zrtI gave source code access to current customer and I evaluate every new piece of code we write if it is appropriate to open source it. Older versions and lots of useful functions are generally accessible open source even now.
BOPs development focus is now to create a software stack capable of issuing, trading, auditing digital assets. I am sure that we will open source huge portions of that and that others will be licensed with source code access.
Ah okay, so you share the source with your customers. That's good to know.