I think part of the problem is motivation. I equate the people that strive for VC approach just want to get rich. They don’t care about their employees or their users; they are a means to an end. Raising money assures them no matter what happens to the company they will have a payout even with liquidation preference. Not all VC raises are bad given the right motivation, but more often than not greed comes into the calculation.
I mean, the alternative is to grind out an eking existence on nights and weekends until you're bootstrap profitable and then a "Chosen One" gets funding, or a FAANG comes along and eats your little niche for breakfast...the motivation for raising funding comes from survival instincts.
