Watch the video to see the diff between reboot and shutdown, and the delays. Keep the button at least 3 seconds until the Button-LED starts to pulse.
What PSU do you have?
There are some notes in the guide that explain what you need to do to minimize the effect of poor wiring and causing the rainbow (voltage warning). Use thick and short wires for power. If its not a good PSU, combined with voltage drops introduced by long thin wiring or poor solder joints, it will result in the rainbow.