Is it fair to say that both the CEO and existing investors in Zirtual failed to manage the company’s financials and fundraising work?

I don’t think so.

The only thing that makes sense here is she was furiously trying to fundraise, and it fell apart at the last minute, or otherwise didn’t happen.  They made an investment in subsidizing the business model at first, then raised prices, built a mini-brand, etc.  She did the “right” things at a high level.

I’m assuming the financials, margins (from going to IC to employees) and — probably most importantly growth — simply weren’t good enough to raise money.  It sounds like in particular they had a soft quarter or so, which can just kill a round.

Transparency is great.  But also, you have to fake it until you make it.

My guess is she had investor interest, a poor summer in terms of growth, and it fell apart on her when the investors pulled out or got cold feet when the business didn’t look like it was growing fast enough anymore to support a venture investment.