No doubt that may be true, but if a company doesn't have a clear market fit, how will more cash solve that? It just extends the opportunity to find such fit. I

No doubt that may be true, but if a company doesn't have a clear market fit, how will more cash solve that? It just extends the opportunity to find such fit. I don't doubt that investment money thrown at the correct product can spur it along. However, I believe most investors are looking for long shots, or returns better than the stock market. To obtain those type of gains, they will invest in the companies that can go boom or bust. In contrast, the company that doesn't take money is incentivized to simply not go bust (even if it grows more slowly). They have to be cautious, keep their customers and grow. It's a requirement. That being said, I don't disagree with you. Perhaps, I'm completely wrong in gneral, but from my circle of friends that appears to be the case.