Well we were starting a new clustered, virtualized hosting environment so we had hard cash needs to get our first set of servers and equipment and data center space. So it's a little different then starting a software company without the same hard costs.

We basically built something like ec2 but with more advanced features like load balancing and clustered, posix compliant filesystems. And we shipped before ec2 came out or was even known about publicly. This kind of system costs $$ to do right so the 120k went mostly to hardware and data center costs to bootstrap us to the point where we could take customers.

We started planning in february of 2006 and shipped in september 2006 and it's been a wild ride since then.

ps - sure, no problem. Let me know if anyone has any other questions.

pps - yeah one of our founders started Parallax who made the BASIC stamp.