Unless your product requires you to build a factory (and even if you're in the manufacturing business its highly unlikely that you can't profitably outsource ev

Unless your product requires you to build a factory (and even if you're in the manufacturing business its highly unlikely that you can't profitably outsource even manufacturing) -- then you absolutely shouldn't take VC funding. YC, Angel, Friends and Family, maybe even a couple million (to last several years)... but not VC funding. VC funding is for people who would like to spend four years working like a dog for a %1 chance to get $10M in payoff...than the alternative of four years working like a dog for a %400 chance of getting a $1 million payoff. The value of these two opprotunities are $100k for the VC route and $4M for the independant route. But, like contestants on "Deal or no Deal" they don't do math and they go for the big score instead of the sure thing. You only hear about the people who get the big score- they go to conferences and they start investment funds. but for each of them there are 100 or mor equally talented people who went the VC route and are now employees somewhere because the VC killed their company. The big difference is when you get on the VC treadmill, as pointed out, the only options viable to the VC is IPO and acquisition... and you'll be diluted all to hell. Worse, you'll hire too many people spend too much money and lower your chances of success.... because you're spending that money before you know it works. And you pay in equity for the priviledge of lowering your chances. On the other hand, if you angel fund, you can quickly determine whether the business is viable, and if it isn't, you only spend a few months on it before trying another idea. In four years you should be able to try 16 businesses .... but likely you'll make $1M per year doing it. And at the end of it, if you've failed and you've got a business that's throwing off $400,000 in cash for you for profit (your share) you could stop working and live on that $400k. The 99 out of 100 times that your VC backed venture fails, you've got nothing to show for it. So, even if you "Fail" and have a business worth $4-$8M, you still win. One of the commentators had an excellent and underrated point: "And thats the rub. Every lawyer, finance, and admin guy you run into at a VC firm will think they know your idea better than you, and worse yet, better than your intended customer. Sure, they will give you funding, but along with that funding comes their screwed up way of thinking that no matter how much you, because they have money, or an mba, or a bar number, that qualifies them to tell you how much more they know than you." Never met anyone associated with a VC (including Seqoia) who wasn't dumb money but thought they were smart money. (except Guy Kawasaki, who is smart enough to realize he's dumb. If you think you're smart, you aren't, if you think you're dumb, you're smart.)