A lot of companies are bootstrapped or "seed-strapped".
My company raised a $1.2m seed after doing a startup accelerator in 2015, used it to get to profitability, and we've been growing 40% YoY for a very long time without any additional outside capital.
It's also a huge selling point to prospective employees while interviewing candidates: "Unlike many other startups, we haven't raised lots of money, we're profitable, we've never done lay offs. That's all possible because we have product market fit and we have a sustainable business model. Our customers (rather than VCs) fund our growth."
Personally, I really like the "seed strapped" model... raise 1-2 million in order to find PMF and begin an early sales/marketing function with the goal of reaching profitability before the $1-2 million is burned through. It also creates a short window to fail fast... lots of companies raised way too much money and will end up failing very slowly.
"Failing very slowly" is what should be avoided.
Raising huge amounts of VC is a signal the company couldn't sustain their growth with their current revenue and operating model. It's also a signal that the company is likely using inorganic / unscalable tactics to grow, which might work now but won't work forever. That means the company will likely pivot their model at some point (from an employee perspective, that means higher risk of lay offs, and from a customer perspective, that means higher risk of price hikes in the future, etc)
This is an entirely valid model, and many startups would be better served by following it. Still, the whole point of (larger) VC funding rounds is facilitate rapid growth, far more than 40% year over year. There's no contradiction between embracing bootstrapping/seedstrapping where it works, and VC funding for the cases with hyper-growth potential.
My company raised a $1.2m seed after doing a startup accelerator in 2015, used it to get to profitability, and we've been growing 40% YoY for a very long time without any additional outside capital.
It's also a huge selling point to prospective employees while interviewing candidates: "Unlike many other startups, we haven't raised lots of money, we're profitable, we've never done lay offs. That's all possible because we have product market fit and we have a sustainable business model. Our customers (rather than VCs) fund our growth."
Personally, I really like the "seed strapped" model... raise 1-2 million in order to find PMF and begin an early sales/marketing function with the goal of reaching profitability before the $1-2 million is burned through. It also creates a short window to fail fast... lots of companies raised way too much money and will end up failing very slowly.
"Failing very slowly" is what should be avoided.
Raising huge amounts of VC is a signal the company couldn't sustain their growth with their current revenue and operating model. It's also a signal that the company is likely using inorganic / unscalable tactics to grow, which might work now but won't work forever. That means the company will likely pivot their model at some point (from an employee perspective, that means higher risk of lay offs, and from a customer perspective, that means higher risk of price hikes in the future, etc)