Venture capital can be a brutal, brutal game. Just ask John Connors, the former Microsoft chief financial officer who now serves as a partner at Ignition Partners in Bellevue. Ignition had the foresight to bankroll one of the Seattle area's most promising up-and-comers when it invested in Apptio, a fast growing Bellevue startup which helps chief information officers at major corporations get a better handle on IT costs.

But when Apptio announced its $16.5 million third round of financing this week, Ignition was nowhere to be found. What happened? Quite simply, Connors admits that he screwed up.

When Apptio raised cash last year, Ignition passed on the opportunity because Connors felt at the time that the deal was too expensive.

“In all honesty, I screwed up in [the] B round, as I thought [the] deal was too expensive, given the opportunity,” Connors tells PeHub.com's Connie Loizos.

John Connors

In an email to TechFlash, Connors bluntly stated: "Dang, I am sorry I screwed up on this one."

In my experience, venture capitalists typically don't like to admit when they get something wrong. (An oddity given that most of their investments fail). So, in that regard, Connors' openness should be applauded.

Ignition remains an investor in Apptio. But because it skipped the opportunity to invest in the series B round and then got passed over in the series C, its stake in the company has been squeezed as the other existing investors in the deal (Madrona, Greylock, Andreessen Horowitz and Shasta) added more cash. The most recent round was "oversubscribed," meaning that the existing investors were willing to put in even more money.

Apptio also received offers from other venture capital firms that weren't already part of the syndicate, but the company turned those down in favor of taking cash from the existing firms. That's one of the reasons why the deal closed so fast and the terms were so favorable. But the bad news for Ignition was that there just wasn't enough room to get back into the deal.

Apptio -- led by serial entrepreneur Sunny Gupta -- has been on an absolute growth tear in recent months. Sales are expected to hit the "double digit" millions. The employee count has already doubled this year to 85, with a plan to hit 115 in the next three months.

"We think it is a multi-billion dollar style opportunity," Gupta told TechFlash. "And I've never seen an opportunity like what Apptio is on."

Gupta, who later in the week was not available to comment on Ignition's role, told TechFlash that he wants to build the next big technology company in the Pacific Northwest.

Ignition may have a role in helping to achieve that status, but probably not as big of one that it would like.