Should we try and raise capital for our yet unlaunched bootstrapped company and products, even though it's an un-sexy product in an unsexy market (that we happen to know well)?

Before you pitch for funding you definitely need to come up with a better description of the market than "unattractive market not growing with lots of aggressive competitors". Having an incomplete product, no customers and no money says to potential investors "this team does not execute well". If you're able to dig your way out of this, don't let your startup get in this position again because it leaves you with no leverage in funding negotiations. You leave investors holding all the aces and in the event you're able to persuade someone to make an offer, they can ask for any valuation they want, and it you need the money, you have no choice but to accept the valuation. So now is not the time for you to raise. Put it in the freezer and go get some contracting work to pay the bills and save a little to complete the product and win some customers later. Sounds like market conditions could only be better then anyway. When you hold at least one ace, that's the time to find investors. To recap those aces again: Kick-ass product No/slow/dumb competitors Acquiring customers and making them happy Team that executes Don't need to raise more money yet

If you approach angels, it is unlikely you will get investment, with an unsexy product in an unsexy market.  VCs wouldn't be interested at all. You may get vulture style offers from angels with a little money and be forced to give up a big chunk of the company.  You will also waste months trying to raise the funds that you could be using to get your minimum viable product out the door. Have you shown your product to potential customers?  Would they be willing to pre-buy or invest?  That may be your best avenue (and you will get valuable customer feedback).

Our product could be described similarly.   The best way I can answer your question is to tell you what we did / are doing. What we did was: 1) researched competitors and mystery shopped those whose features sound closest to our ideas on how to differentiate ourselves 2) conceptually walked through the product's technical design to identify those technical items that seemed most likely to be technically challenging but critical, then did two months of R&D to asses if these were plausible to address 3) did some customer development at friendly firms to "sell" our product 4) did a lot of Q&A posting on various (and appropriate) forums asking about the pain points we planned to solve to see if anyone knew of existing solutions 5) then and only then did we start earnest building.  6) we have actively courting customers for the last month to sign up at full price once the product is live.  We are fully bootstrapped and plan to launch our beta by the end of this month.  All the founders have 20 years of experience.  Why tell you all this? We still plan to raise funds even though we have gotten green signals at each of the above steps. It simply takes a lot more time and money than you would ever expect. Hope this helps.