If you're "ramen profitable", why do you need a VC at all? You're self-sufficient by that time, you have proven your product - you should be talking to a bank, not YC.
Regardless, there are still good reasons to seek VC investment when profitable. Several YC startups are going down that path. A bank might lend you $10-50k if your net is $2k/month while a VC might invest $1-5 million.
I don't think it's ironic at all. VC investment involves a risk calculation, profitability means a lower risk but in return the VC should be willing to accept a higher valuation.
We're raising money currently, and our investors have told us that revenues would come quite distant in terms of variables on if they'd invest. They love a great team, a huge user base and a lead on the market. Sure, having revenues extends your runway, but most investors seem to be of the opinion "users now, profits later".
I guess my question is, would a VC prefer a massive unmonetized user base, or a much smaller user base with revenues?
Oh I agree of course. VC will be judging you on future potential; a bank will be judging on current performance. If you need a million dollars to really scale up, you need the VC. Facebook or Youtube come to mind, they could have never achived what they have without VC.
But if you don't need the huge cash injection, if you just need to incrementally ramp things up slowly, then VC is not your only option; that's all I'm trying to say.
What do they need money for?
A case could certainly be made that they took too much money, and I would agree with that, but they did need money from somewhere.
Conservatism is rife in the banking sector at the moment but at the same time, making loans is their job, after all.
Banks aren't in the business of betting on the success or failure of companies. They're in the business of liquidity.
I was actually thinking in terms of personal loans, which have less onerous collateral requirements since the debtor can't simply walk away from the loan, but I guess I am making assumptions about the creditworthiness of the founders in that instance, too.
It does kind of beggar belief that a couple of smart middle class kids with an obviously working business plan couldn't get someone to loan them a few grand. I guess you can't count on it, though. Point ceded.