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.
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?
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.
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.