I tend to disagree with the logic here. I think another way to frame this is that companies that don't NEED VC money (I emphasize NEED because we all know there

I tend to disagree with the logic here. I think another way to frame this is that companies that don't NEED VC money (I emphasize NEED because we all know there are a lot of companies of late that aggressively go after VC dollars without any real plan for how it is to be spent) are going after a space in which it is probably extraordinarily difficult to build a $100k business, let alone a $50MM business. No matter what, if you don't need a huge amount of money to start, the initial barriers to entry in monetary terms are low. It is certainly not impossible to build a sizable business out of complete obscurity without investment (because money is just one barrier to entry), it is just extremely difficult to do. If it is easy to build, there will be an enormous amount of competition until the ability to make any money is squeezed out. If it is extremely difficult to build, your competition will be very limited. So I actually believe the exact opposite is true- the more investment money you NEED, the less competition you're going to face. It may be tempting to think that if you just go after a very small, niche market, you can corner it really easily because everyone else will ignore it in favor of larger opportunities, but that's just not realistic. Again, not saying there is anything wrong with this approach (I believe bootstrapping is better than trying to get overly aggressive early on in your career), but very few businesses are easily built and sustained for a long period of time.