To a first approximation, an inability to get UL certification means a product failed to demonstrate compliance with well established safety expectations…technically it means the insurance industry will not treat it as ordinary risk.

The ramifications range from inability to obtain product liability insurance for manufacturers, the voiding of general liability for users, and the fire marshal shutting down places where the system is installed.

Keep in mind that new products get listed under new standards developed by manufacturers all the time. But only when the new standard demonstrates ordinary safety.

The simplest likely explanation is that vc did not believe the technology was worth betting on.

Yes I remember this story, and something like this was the case - the product's readiness and market viability was overstated, and the company has been tossed around between investors for quite a while.