The problem I'm worried about is precisely what you're warning against: I'm confident that I can successfully launch in one city (with my own funds) but I'm afraid that this will be considered post-launch and pre-traction when I solicit investors.
launch in 1 city -> recoup -> launch in another city -> recoup -> ... do that enough times and you either have traction and/or you don't really need investors.
i suspect that your prediction of the recoup-ability is what's off.
The startup's customers are from among many verticals. Acquiring those customers is why I need the sales team. I can work to acquire a few myself within a specific vertical. To service the acquired customers is where the monetary expense is required (think PPC ads that are later billed to the customers, for example).
Of course, I can do one at a time, but why? That's the point of me wanting to seek funding - to scale quickly...to go after multiple companies in multiple cities within multiple industries.
(b) is golden. In a way, it's like ignoring a girl that I like, while making myself discernibly more desirable.
Thanks.