Those checking the tote sheet of well-funded startups seeking a second round of funding -- a dicey business in these days of tightening venture markets -- could have concluded that PrimeStreet was a solid bet to get cash.

The 2-year-old Boston company had a proven technology -- a transaction engine designed to help banks and other lenders check credit and speed the loan application process for small business owners.

It had good partners, including Automatic Data Processing, Citigroup's bizzed.com and LendingTree.com. It had more than 93 on- and offline customers, with others in the pipeline. And it had $41 million in venture backing -- among the 10 highest amounts given to financial service startups last year -- from Capital Z Financial Services, Royal Bank Ventures, Carlyle Venture Partners, MDC Corp. and Angel Investors.

What it didn't have was revenue coming in the door fast enough. PrimeStreet's prime customers, banks, don't move quickly when replacing their small business lending processes, so the sales cycle was slow.

Investors said they'd back PrimeStreet in six months, once it had delivered its product to more customers and proven its ability to scale. But PrimeStreet needed money today, not six months from now.

So yesterday, the company pulled the plug. It laid off more than 60 of its 70 employees and is using Goldman Sachs, which had been seeking its second-round investors, to look for a buyer of its technology instead.

"It's really disappointing," said Eleni Varitimos, a PrimeStreet business analyst who's helping the company wind down and complete its asset sale. "We did offer the best technology platform on the market. But the company with the best product isn't always the one that wins the race."

Varitimos said the company was doomed by the combination of a cautious investment market and a slow revenue cycle.

"Financial institutions are very risk averse," she said. "Small business lending is a core part of their business, so they moved very slowly. They'd sign MOUs, and then there'd be a lot of testing. That prevented us from getting revenue on the books as fast as we and our investors would have liked. From the investors' perspective, it was smart to wait to see if we could deliver what we promised. But the longer they made us wait, the worse it got."

All employees were given severance packages. The remaining employees, including founder and CEO Kevin Talbot, will help with the asset sale and ensure that existing customers are taken care of by the buyer.