To some, I think it's like getting into an elite school - with similar effect. You're paying out quite a bit of your company, in most cases, and getting some c

To some, I think it's like getting into an elite school - with similar effect. You're paying out quite a bit of your company, in most cases, and getting some capital in return. But what you're also buying into with your equity is a large network of alumni and connections. In addition, just like how some (silly, IMO) companies hire Ivy League grads because they've passed someone else's rigorous selection process, getting funded by an A-list VC proves to some that your company has chops. So for many founders, trading equity for VC investment is also a hedge for the future - a glowing resume item useful for driving business or acquisition at this or the next venture. Personally, I think the more early-stage-successful companies stand on their own merit rather than buying into the "old boy's" VC club, the better. I think more weight has been placed on VC selection than is reasonable of late, both in M+A and the tech media. The more successful companies buck this trend, the more likely non-VC companies are to get considered for acquisition down the road, and the more likely said companies are to be able to drum up press for an IPO, as well.