"Lifestyle business" as I know it is a term used by VCs (in a derogatory sense) for a business that sustains with small profit, enough to keep going or even permitting the founders to live well, but not exhibiting the 40x growth that VCs would like.

VCs would rather see a startup fail, for at least in such a situation they can write down their investment as a loss and move on; whereas in a lifestyle business their capital remainds bound. The founders may be perfectly happy in that situation, but never be able to produce an exit of the kind risk capital seeks.

There is nothing wrong with desiring to set up a lifestyle business from a founder's perspective. But it is not appropriate to use risk capital to fund it, because neither the risk is high enough nor is the return; so bootstrapping or bank loans are more appropriate to finance them (some individual business angels may be okay with smaller returns that professional VCs - as long as returns are at least higher than the 16% you can typically get from investing in an index).