MoviePass, the embattled movie-ticket-subscription service, shut down over the weekend after burning through hundreds of millions of dollars.

The service had become a joke in the industry for its unsustainable business model.

Contrary to a popular media narrative, however, venture capitalists were not the ones who lost money on the startup's downfall.

MoviePass' parent company, Helios and Matheson Analytics, flooded the public markets with millions of new shares to cover the service's massive losses.

Many of the losers were unsophisticated retail investors, some of whom previously spoke with Business Insider about believing in the MoviePass product.

One retiree investor named Ken said he had lost around $190,000 on the stock.

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MoviePass finally died over the weekend, but the movie-ticket-subscription service had become a punch line long before that.

Recode's Peter Kafka summed up the general sentiment best in a tweet on Friday: "Sometimes the 'lose money on every transaction, try to make it up with volume' model doesn't pan out."

It's easy to understand why charging $10 per month and letting a subscriber see up to 30 movies in theaters per month didn't work — especially when MoviePass was paying those theaters full price for the tickets.

But what's less widely understood is who the real losers are in the MoviePass story.

There has been a tendency in coverage of MoviePass to treat its demise as having no sympathetic victims. That attitude is represented well by a tweet that went viral last year from The Atlantic's Derek Thompson: "MoviePass isn't a business so much as a late-capitalist welfare program that redistributes hundreds of millions of dollars from venture capital to subsidize American leisure."

The joke here hinges on the fact that venture capitalists — who can certainly afford to light a few hundred million dollars on fire — are the losers. But that's not actually what happened with MoviePass.

The venture capitalists who invested early in MoviePass were paid out when the startup was bought by Helios and Matheson Analytics in a deal that valued it at more than $50 million. After Helios and Matheson took a controlling stake in MoviePass in 2017, the service dropped its price to $10 per month, and the gargantuan losses, to the tune of hundreds of millions of dollars, began in earnest.

At the time, Helios and Matheson, which was run by the penny-stock guru Ted Farnsworth and had ties to an Indian company accused of massive fraud, was listed on the Nasdaq with the ticker HMNY. To cover MoviePass' losses, Helios and Matheson flooded the market with millions of new shares.

Many retail investors who believed in the MoviePass product snatched up the new shares, only to see the value of their stakes crater as the stock fell more than 99.99%. Helios and Matheson was eventually kicked off the Nasdaq.

Last summer, I spoke with Helios and Matheson investors who felt betrayed, both by management and by the Wall Street analysts who kept "buy" ratings on the stock for months while it plunged, as their firms made millions helping Helios and Matheson sell new shares. One retiree investor, Ken, talked to me about losing around $190,000 from investing in MoviePass.

As some of my readers pointed out, those investors should have known better. Of course they should have. But it's a lot harder to laugh at an unsophisticated investor who lost a big chunk of his retirement savings — like Ken did — than it is to laugh at a venture capitalist who made a bad bet.