The only thing I find disheartening here is his discussion of how he lost funding because he told his friend they were struggling and had no idea what they were doing. This implies to me that they were not being transparent with the investor, and in essence were on the verge of "stealing" the investor's money because of it, because his aim was essentially to sell the investor on a thriving business that was in fact not there.
An investor should get a real and full analysis of the business, with accurate numbers, so it should not have come as a surprise or a fallout if someone said they "were struggling", because simply, their numbers and growth should have shown otherwise if they were actually worthy of investment, and no conversation should have been able to sway that.
You should never fear a transparent conversation with others getting back to important parties as long as you really have nothing to hide.
Still building the same company, so we weren't conning any investors. And we weren't doing poorly back then... Just going through some challenges. Site load bringing down servers, hiring, etc. rarely can an investor take the time to really know every possible deal and founder in the seed stage. They're looking at a volume of deals and need to be able to take thin slices of founders to make decisions.
And again, the point of my post is to say... Yes, we're not fully transparent with people because everybody else isn't. We're to blame first for the lack of transparency. I'm making an effort to change this.