Agreed. How could a company with "millions in revenue" not backup critical databases? Not only were they exposed to the threat of human error, but hardware failures, hackers, etc. When he submitted his resignation, the company should have encouraged him to stay. Instead, anyone at the company that had anything to do with the failure to implement regular database backups and the use of redundant databases should have been fired.
I've had more than my fair share of failures in the start up world. It always drives me crazy to see internet companies that have absolutely no technical ability succeed, while competing services that are far superior technically never get any traction.