A non-funded company is not by definition a 'life-style business'. That's pretending there are only two choices whereas in fact there is a huge continuum ranging from mom-and-pop operations all the way to enormous privately held conglomerates.

If you work for a venture fund you should know that the choice is slightly more complicated than funded and life-style businesses.

Being 'happy' does not mean someone wants a 'life-style' business, it simply means they want a healthy work-life balance and that says nothing about the eventual size of the company.