If it was one of the first small ones and you are using futaba style plugs with the tab down one side this can cause damage to a component on the board if you don't trim the tab as per the additional instruction sheet.
If it is one of the second generation smaller ones this isn't a problem as the component has been moved. You can check this by carefully opening the case and there is a small component on top of the board in line with the edge of where the tab would go in, if it has been broken off the board then this is your problem.
The symptoms you describe don't sound like that problem though as you say it does work some of the time and if you break that component it will just go straight into failsafe.
As you say there is no power to the servo and there are no lights on on the unit this indicates that there is more likely an intermittent power problem rather than a failsafe problem. Have you tried connecting the failsafe to another port say on the steering servo and seeing if the problem then switches to the steering servo or if it stays with the throttle servo? This would help determine if the problem is in the receiver or the failsafe.
If you try this and the same thing happens on the steering servo then it is most likely an intermittent power problem in the failsafe maybe a bad solder joint, it is extremely rare but it can happen.
If you try the above and you are convinced it is still the failsafe then I would suggest sending it back to Venom for testing and if it is a manufacturing fault it will be replaced.
Not sure where you are based. If you are in the US e-mail Clint@venom-racing.com
and if you are outside the US e-mail Chris@venom-racing.com
for return details.
As to the failsafe working with the M8 it has been tested with standard and JR digital servos and worked fine with both during testing.