The strongest argument in favor of VC would be the ability to deliver capital where otherwise none would be available, the ability to generate above-market retu

The strongest argument in favor of VC would be the ability to deliver capital where otherwise none would be available, the ability to generate above-market returns (at least circumstantial evidence of offering value), and the experience/insights that emerge from experience with other startups. The counter-argument would be, as PG alludes, the best VCs don't act like most of the others, the massive capital their business model requires them to invest causes misaligned incentives with respect to founders (e.g. the founder is happy to sell for $15M, but the VC folks are not), and there's a fair bit of IP security concern. The bottom-line suggests a revisiting of incentives from both parties. Founders need some access to the VCs broader returns (possibly even offering their insight into OTHER businesses under the VC's flag) and VCs need to assess their returns over much larger temporal horizons than most funds will consider.