That's a great question, and one I won't pretend to have the answer to. On one hand, Basecamp has carved out a very profitable niche for themselves despite venture-backed competition from Jira and others, so it's certainly possible. I also think that there is a big difference between taking money when you are small with typical angel / seed-round terms and taking late-stage money with 2x VC liquidation preferences and a private valuation north of $1 billion. Then again, like you said, it can be very tough to turn a profit when you have to compete with companies undercutting you by subsidizing their prices with an enormous reserve of easy VC cash.
