> However, that same $1M/yr is enough to sustain a bootstrapped business and even possibly build the credibility to raise a larger round and try to win the space.

And often, $1M/yr is not even needed. Many developers don't necessarily want to become managers and worry about funding rounds, hiring, etc. $1M/yr is already a pretty good lifestyle, no need to get further funding or scale the business if you're happy running the project on your own.