With the proviso that this is more applicable to us knowledge workers than to a business which needs massive capital investments: there is another option to being a slave to investors. Bootstrap.
I started my business with a budget of $60, and spent $56 of that. Every. Single. Penny. of expenses since then has come from a paying customer. I have never worried about not being able to make payroll. OK, technically, there is no payroll (I'm not the world's biggest fan of the employer/employee relationship, for many reasons), but when I tell my freelancers "Hey, Bob, I will pay you a thousand dollars if you can do X up to your usual level of quality, how's about it?", I have never once thought "Oh, effity, now I have to convince someone to give me a thousand dollars so I can pay for Bob's time". (One reason Bob, and the rest of my freelancers, are typically happy to work for me is that I pay my invoices in Net 30 -- minutes, that is.)
This means that instead of being tied to the telephone, I think I have made two calls in 3 years. The first was to give someone their credentials because their email inbox was full and they had indicated it was an emergency for them. The second was when Google asked me for a favor, because when Google asks for a favor I can damn well make time for a phone call.
Your points are valid. However, although I'm not certain HER startup qualifies, there are businesses that cannot be started without at least some cash investment.
Your model really only works in software, consulting, or services. And it doesnt always work in software. Sometimes you need to buy/lease computers. Or cars. Or Steel. Or Whatever. And that takes money.
Plus, a business may be generating revenue, but have cashflow issues. This again depends on the business, model, industry, etc.
Simply saying "Bootstrap" is not always good enough. Granted, from the looks of her company, it should be in this situation, but shes already dug 60 feet into a hole, and its nearly impossible to 'bootstrap' yourself out of a situation like that.
You've said elsewhere you earned $1000 USD your first year. At that rate of income I doubt your expenses are factoring in your time.
Not being critical or aggressive here. I'm in the online content business myself, but we have costs associated with content production and would be out of business fast if we only earned 1k a year. I don't think your experience generalizes to a lot of other cases, that's all
I started my business with a budget of $60, and spent $56 of that. Every. Single. Penny. of expenses since then has come from a paying customer. I have never worried about not being able to make payroll. OK, technically, there is no payroll (I'm not the world's biggest fan of the employer/employee relationship, for many reasons), but when I tell my freelancers "Hey, Bob, I will pay you a thousand dollars if you can do X up to your usual level of quality, how's about it?", I have never once thought "Oh, effity, now I have to convince someone to give me a thousand dollars so I can pay for Bob's time". (One reason Bob, and the rest of my freelancers, are typically happy to work for me is that I pay my invoices in Net 30 -- minutes, that is.)
This means that instead of being tied to the telephone, I think I have made two calls in 3 years. The first was to give someone their credentials because their email inbox was full and they had indicated it was an emergency for them. The second was when Google asked me for a favor, because when Google asks for a favor I can damn well make time for a phone call.