Others have mentioned the downside of having venture capitalists hanging around, wanting an "exit" -- a way to get their money back tenfold or so. A couple of

Others have mentioned the downside of having venture capitalists hanging around, wanting an "exit" -- a way to get their money back tenfold or so. A couple of other observations: 1. VCs only crowd around trying to invest in you when you don't need the investment. If you actually needed more capital to keep going, they'd be hard to find. 2. they'll make your ownership structure more complex. Read about cap tables, preferred shares, and participating preferred shares, to learn a bit more about this. All the complexity favors them, not you. A suggestion: if you need an investment in your enterprise business, ask one of your customers to invest, or to pay for some development that benefits them. Enterprise customers do this. And they're far more patient than VCs. Another suggestion. Think of your businesses as businesses. Unless you're looking for a quick exit, you have more in common (in terms of bookkeeping and finance) with a local bookstore than you do with a typical VC-funded startup. Ask yourselves these kind of questions: Are you making enough money to meet your expenses and payroll? Are your customers happy? Do you like making and selling your product / service? Do you want to keep doing it for a few years into the future? If the answer to these questions is "yes" then great. Looking to the future: Need for funds: Will you or a partner need to take some money out of the business at some point to pay a big bill or two (college fees for kids and the like)? If so, how will you manage that? Succession: What if you and/or a partner wants to retire? Are you funding 401Ks for yourselves and your employees?Can you sell the business, or have a younger family member take over? A final suggestion. There's an outfit called SCORE.org. Use them. They're affiliated with the US Small Business Administration. "Service Corps of Retired Executives." They offer free (yes, really, free) and confidential advice to business owners. You can ask general questions like "here are our books, what do you think?" or specific questions "How can we get new customers in Europe?" "We're growing and need to move, how can we make sure we get treated fairly?" and "We want to sell the business in ten years; how can we prepare for that?" I've volunteered for SCORE and can vouch for both their cost (0) and their confidentiality. My fellow volunteers were really wise folks; I learned a lot from them. We were NOT ALLOWED invest, or even offer to invest, in the businesses who used us. And the NDA we signed has teeth. It was with the feds; the FBI has been known to go after SCORE people who abuse the trust of their clients.)