Investors in startups are making bets. If they deserve the huge payouts they get when they bet correctly, then they don't deserve pity when their bets go wrong.

In this particular case, Bill Nguyen had a whole bunch of red flags, including exiting shortly before his previous companies failed. I, for one, am not happy that investors continue to give such large amounts of money to such obvious carpetbaggers. The Bill Nguyen's of the world thrive because they are allowed to.

Giving a company a large amount of money and watching it spent poorly does not make "really good investors".

As investors, isn't it part of their job to ensure the people they are giving boatloads of money to aren't grime?

I agree that the whole story of Color was a "shame", but the whole thing sounded like an overhyped pipedream to most onlookers to begin with, so when it turns out that's what it was I'm not going to cry a river for the investors.

Bluntly, that's the point of investing. The investor assumes the risk that their invested capital vaporizes. The risk assumption predicates the possibility of higher returns than a less risky investment. It's not a savings account with guaranteed returns.

Last time I heard vague numbers thrown around, 90% of VC-funded startups fold, 9% go into some kind of functional equilibrium, and 1% make it big. Ergo, you should actually reckon on failure being the norm.

Company still has a significant amount of cash left in the bank that they're returning to investors. Someone below quoted 25m? I wouldn't be surprised if it was even higher.

Who's to say that they spent the $41.m million? What ever's left will be returned. The fact that Apple bought them for $9M hints that Apple may be covering the amount they spent but even that is pretty hefty. The investors won't be able to reinvest it in their current funds though.

Where did all that money go? How many employee did the company have?

Will we ever know how much Apple paid for Color?