The VC's arguments are quite sound. He is not saying he wants to outsource everything, he simply wants the culture of outsourcing in early to make it smoother

The VC's arguments are quite sound. He is not saying he wants to outsource everything, he simply wants the culture of outsourcing in early to make it smoother in the case outsourcing is needed. I would outsource non-critical areas of your development, like analytic trackers, admin dashboard, deployment scripts, reports, (bug fixing?) so that the core team can focus on listening to the customer and react quickly. Having to deal with a global team has its benefits and drawbacks. My experience has always been great. Waking up the morning and seeing that progress has been made during the night is an awesome feeling. Maybe your experience with outsourcing has been a negative one, but even if you disagree with your investor you could still agree to bring an outsourced team to develop second importance stuff to experiment and prove to your investor it is not a good idea to outsource. In the case outsourcing works for your project, you also win.