From Chased Out by VCs to $30M Raised: How Sikka Proved Investors Wrong About ‘Too Small’ Markets

From Chased Out by VCs to $30M Raised: How Sikka Proved Investors Wrong About ‘Too Small’ Markets

Getting rejected by investors is common. Getting chased out of the room is something else entirely.

In a recent episode of Category Visionaries, Vijay Sikka, CEO and Founder of Sikka, a retail healthcare technology platform that’s raised over $30 million, shared how Silicon Valley VCs dismissed his market as too specialized and too small. Their rejection revealed a fundamental misunderstanding about how niche markets connect into massive opportunities. A decade later, those same investors watched Sikka reach 45,000 practices, achieve EBITDA profitability, and build moats that would take competitors six to eight years to replicate.

This is the story of when to ignore investor feedback—and what you need to prove them wrong.

The Dismissal

“In the early days, I would get chased out of the room by the investors because were so focused on dental,” Vijay recalls. “And they would say, oh, dental is not a big enough market.”

Not just passed on. Chased out of the room. The body language of investors telegraphed their thinking: dental software is too niche, too specialized, too small for venture returns. Why build software for dentists when you could build for enterprises? Why focus on small practices when you could target Fortune 500 companies?

The feedback was consistent across multiple firms. Dental wasn’t a market worth serious capital. Move on to something bigger.

For most founders, this level of rejection triggers a crisis. Maybe the investors are right. Maybe the market really is too small. Maybe it’s time to pivot.

Vijay did something different. He kept building.

The Hidden Market Inside the Dismissed Market

The investors saw “dental software.” Vijay saw something larger: retail healthcare.

“Anything that we call as we refer to as retail healthcare, which is almost approaching a trillion dollars in market services a year in the United States,” Vijay explains. Dental wasn’t the market. Dental was one vertical within a massive ecosystem that included veterinarians, optometrists, chiropractors, orthodontists, and oral surgeons.

“There’s 250,000 providers in this market,” spanning all these specialties. Each operated with the same structural problems: siloed systems, terrible technology, and business inefficiencies caused by clinicians running practices without business training.

More importantly, they all operated the same way. “A dentist role, a veterinarian’s role, an optometrist role, chiropractors role, orthodontist role, is exactly the same. It’s siloed small.”

The technology needs were identical. The workflow patterns matched. The integration challenges mirrored each other. Sikka’s solution for dental practices worked for veterinary practices with minimal changes. “We realized somewhere around 2016 that, you know what, this entire, it’s just a continuum and our solution is applying to everything.”

What investors saw as “too focused on dental” was actually a wedge into a nearly trillion-dollar market. Dental was the starting point, not the limitation.

The Bootstrap Validation Strategy

Rather than pivoting to make investors happy, Vijay doubled down. “Initially we thought honestly that we’ll just build a bootstrap business,” he explains.

This decision proved critical. Without venture capital pushing for faster growth or broader positioning, Sikka could focus on building real value in the market investors dismissed. “We kept growing organically by servicing our customers. We kept growing our install base.”

The bootstrap period served multiple purposes beyond survival:

Market validation: Customers paying with their own money proved the value proposition. If the market was too small or the need wasn’t real, organic growth wouldn’t happen.

Technical moat building: “It took us 10 years plus to build all the connections to 450 practice management systems.” Without VC pressure to show rapid growth, Sikka could invest in infrastructure that would later become unassailable competitive advantage.

Business model refinement: Growing organically forced discipline around unit economics. Every dollar had to generate more than a dollar. This constraint produced a distribution model that would later impress those same investors who chased Vijay out of rooms.

Cross-vertical expansion proof: By 2016, Sikka had proven the solution worked across dental, veterinary, and optometry. The “too focused on dental” objection evaporated when the platform served multiple verticals through the same infrastructure.

When the Market Revealed Itself

“Once we did that, now we had a platform which would connect with 96% of the market in the United States and Canada. And we brought our first investment around 2017, 2016, 2017 timeframe.”

Notice the sequencing. Sikka didn’t raise capital to build the platform. They built the platform first, then raised capital from a position of strength.

By 2016-2017, the company had:

• Connections to 450 practice management systems
• Access to 96% of the retail healthcare market through one integration
• Proven expansion across multiple verticals
• Organic growth validating product-market fit
• A technical moat that would take competitors years to replicate

“We started to see rapid growth. We expanded our platform. We won four best health API awards, the latest one being just this year a couple months ago.”

The investors who saw “too small” in 2006-2010 saw “inevitable success” in 2016-2017. The market hadn’t changed. The proof points had.

The Psychology of VC Market Sizing

Understanding why VCs dismissed dental helps founders recognize when investor feedback reveals opportunity rather than limitation.

VCs pattern-match to previous successes. They look for markets that resemble Salesforce, ServiceNow, or Workday. Large enterprises, big contracts, recognizable logos. “Dental software” doesn’t match that pattern.

VCs underestimate markets without obvious aggregation. 250,000 independent practices looks like impossible fragmentation. They don’t see how API platforms create aggregation layers that make fragmented markets accessible.

VCs overweight TAM slides. A PowerPoint showing “dental software market: $500M” triggers immediate disqualification. They miss how wedge markets connect to larger opportunities that reveal themselves only after the wedge is established.

VCs think in 7-year fund cycles. Building infrastructure for 10 years doesn’t match their return timelines. They want rockets, not compounding advantage machines.

“In the early days, I would get chased out of the room” wasn’t about Sikka being wrong. It was about VCs optimizing for pattern-matching rather than first-principles thinking about market opportunities.

When to Ignore Investor Feedback

Vijay’s experience offers a framework for evaluating investor rejection:

Ignore investors when:

They’re pattern-matching rather than analyzing your specific market dynamics. If feedback is “this looks too niche” without deeper engagement with the market structure, it’s lazy pattern-matching.

You see obvious connections to larger markets that aren’t obvious from the outside. Vijay understood how dental connected to veterinary and optometry. Investors saw only dental.

You have organic growth and paying customers validating your thesis. Customer revenue is proof. Investor skepticism is opinion.

The technical moat you’re building will be obvious only after it’s built. VCs couldn’t value 450 integrations in 2008. By 2016, that infrastructure was obviously valuable.

The market is too fragmented for traditional approaches, making you the only solution. If investors say “too fragmented,” that might be opportunity, not problem.

Listen to investors when:

Multiple sophisticated investors identify the same fundamental flaw in your business model. If ten smart VCs all say your unit economics don’t work, they’re probably right.

They understand your market better than you do. If a VC spent 20 years in healthcare IT before investing, their skepticism deserves deep consideration.

Your organic growth stalls despite multiple pivots and efforts. If customers aren’t buying even when you give them every chance, the market might actually be too small.

The $30M Validation

When Sikka finally raised institutional capital, the terms reflected strength, not desperation. “We are very lucky to have private equity as well as top Silicon Valley investors on board,” Vijay notes.

The company reached profitability while growing 40-45% annually with 90%+ recurring revenue and 110% net dollar retention. “We are EBITDA positive and we are actually really enjoying. We have our first year of profitability this year.”

These metrics are impossible to achieve while burning VC money to prove product-market fit. They emerge from the discipline of bootstrapping and the patience to build real moats before raising capital.

The Lesson for Dismissed Markets

Markets VCs dismiss often share characteristics that make them exceptional opportunities for patient founders:

Fragmentation creates moats: The “too fragmented” objection reveals markets where infrastructure plays win big. If it’s too fragmented for traditional approaches, infrastructure that solves fragmentation becomes invaluable.

Specialization reveals connections: “Too niche” often means investors can’t see how niches connect. Dental, veterinary, and optometry looked like separate markets. They operated identically.

Technology gaps indicate neglect: If an industry is “50 years behind” in technology, it’s been ignored by serious builders. Less competition, more opportunity.

Small initial TAM can expand dramatically: Dental looked small. Retail healthcare approached a trillion dollars. The wedge reveals the opportunity only after you’re inside.

Sikka’s journey from “chased out of the room” to $30 million raised and EBITDA profitable proves that some of the best opportunities hide in markets VCs dismiss. The dismissal itself can be the signal—if you understand your market better than investors do, and you’re willing to bootstrap until the proof is undeniable.