Does raising seed capital early slow down product-market fit?

When we secured our first small angel round, we immediately expanded our developer team and tried to build three major features simultaneously. Having extra capital made us focus on scale before we had actually validated whether users really needed those features. On our next project, we operated strictly on a lean budget for six months. Because resources were tight, we were forced to talk to customers daily and refine a single core feature until it had real demand.

​Does early funding distract teams from finding true customer needs, or is capital essential to compete in crowded markets?