[gnicholas]

IME it's because you end up spending tons of time on the proposal, with no guarantee of revenue. And then you're in their process, and they'll have their procurement folks hammer you on price. They'll know that after investing all that time in the RFP process, you won't want to give up on the revenue, and they'll take advantage of that.

Big picture: it just frames things the wrong way — if they want to buy from you, then they're buying from YOU. If you get pulled into an RFP, then you're selling to THEM.

That doesn't mean RFPs are always bad, just that they can be terrible for startups that are too small, and not prepared for the process.