For a startup in the technical sense used among Silicon Valley investors, liquidity means selling the company or going public. It's the point at which the growth in the value of equity can be realized as cash.
An investor seeking payments from operating cash flows may be a good investor, but the investment isn't really venture capital and the alignment of interests is not really conducive to a startup in the Silicon Valley sense. Not that that form of startup is better or worse, just different.
Probably the best example of how a startup is meant to work is Amazon. For many years its value grew because it did not turn profits. Expenses generally totaled income plus any new investment. But at the end of the day its value was greater than its liabilities.