I would argue that any business which cannot survive that model is a business that should not exist. If you can't grow organically over time with your profits, chances are you aren't making anything actually useful or worthwhile.
…first of all, what about every business that isn’t software? Restaurants need to secure a lease and buy equipment. Manufacturing anything requires you to build a factory. Then, is it so far-fetched to imagine a software business that needs to write a bunch of code before it can start selling?
That’s pretty silly. Not every business can be started and reach profitability without upfront capital. Even if they did that doesn’t mean it’s bad for a company to take investments to scale faster. Economies of scale are a real thing
