Do you mean VCs work undermine employee-owned businesses in some way? Why would they bother if we're talking about businesses servicing tiny niches?
VCs would want founders to restructure the company and would not invest for future rounds for Series A, B, C, etc, (unlikely to happen since employees own the company) or tell founders to dilute employee owned shares for funding (also unlikely), employees would rather make more self-fund the company with profits than go to VCs for funding.
On the other hand, it doesn't seem like the best move for some product that solves a very specific problem for a very specific group of clients. Why would such a product necessarily even need multiple rounds of funding to be profitable?