I've also known VCs who have said they wouldn't take VC money. VCs expect a high rate of return on the money - they take the risk expecting a high return. And

I've also known VCs who have said they wouldn't take VC money. VCs expect a high rate of return on the money - they take the risk expecting a high return. And if you can get the return on your own money, why not take it? So why go with a VC? 1 - You have no alternative source of income to grow the business. 2 - There is a significant opportunity to scale the business that requires a larger investment, and traditional non-specialized sources of financing won't understand it. (Your local bank or your rich Uncle Jack won't understand why viral marketing and a server farm could enable your business grow 100x, a good VC will.) 3 - Knowledge and Relationships. This is the main reason. A good VC may have been on 30 or 40 boards. They have great pattern recognition for success and failure. They know your industry. Your suppliers and potential customers will take their call. They know how to deal with investment bankers, who won't want to screw them over. It's worth noting that the difference between a good VC and a bad VC is enormous, but they both expect the same return out of you.