Correct - execution is more important than $, but I'd say that 75% of the time, execution is the byproduct of some intersection of capacity and access to capital. Not always, but often enough. So if you're competing against a VC-backed startup, you have to be both frugal enough not to breach the walls of fiscal solvency and really wise about your features, positioning, allocation of efforts, etc etc etc because you'll never beat them competing dollar-for-dollar. Speaking more broadly, venture capital distorts markets. I've called it the "capital-accumulation-market economy" elsewhere and it continues to ring true.

Somebody bigger than you stomping on your toes is always a possibility. This is somewhat mitigated by the fact that VCs are looking for super huge 1000x growth possibilities. If your market will only bear a modest level of growth and possibility, most likely nobody will be interested in investing millions to squash you.

> If your market will only bear a modest level of growth and possibility, most likely nobody will be interested in investing millions to squash you.

I used to be a lot more bullish about this before 2020's interest rate drop and subsequent declining bond yields, and the insane injection of capital into the markets. But now, I'm not so sure. Investors are reaching quite a bit further than I originally had expected in order to seek yield.

And the ability to cost-effectively signal to customers that your execution is better.

No. VCs back an extremely limited number of companies. Most startups target such a limited market (geographic or otherwise) that the VC-backed companies don't bother to compete in such a small market.