A Big Yawn
I've been with 5 startups, of which only 3 had successful exits (IPO, acquisition) and one of those "successes" was in name only using a common trick VC's use to hide their failures. (They have another company in their portfolio buy it.) Nothing in this story sounds the least bit unusual for a startup that has to develop the core technology the products will be built upon.
Startups fall into two general categories. (1) Those that require no new technology development to create their products, and (2) those that require fundamental technology development before they can design a product, much less build it.
All software companies fall into #1, as do most consumer electronics products like phones. TV's, etc. These things may require new circuit designs, or new coding and such, but they don't require someone to develop a fundamentally new material and learn to manufacture that material before one can even know the constraints on any designs will be. Companies that fall into #1 are not "sure things", but their risk is more market risk than technology risk. Companies that fall into #2 have a huge technology risk., and even if they get through that, they then have a huge market risk. Companies that fall into #2 almost always underestimate the time and money needed to get the core technology developed, and so often go into starvation mode where people know what is needed (technically) but don't have the resources to deal with it. Sometimes additional money is raised, and they can then address the issues, and sometimes the investors decide it's not worth it.
Startups, particularly ones developing new technologies, are not for the fainthearted.