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Seth Godin: Don't Take the Money: "Seth Godin offers a concise and well reasoned argument on when not to go looking for venture capital to fund a new business. Particularly useful is his distinction between freelance and entrepreneurial ventures. The latter aims to create an opportunity where '...you scale and suddenly you own real estate or media properties or technology or a system or a brand that people pay for without you actually doing any incremental work yourself.' That 'no incremental work' qualifier is the entrepreneur's equivalent of the VC's exit. It's only feasible if a self-sustaining institution has been created. In contrast, 'A freelance venture is one where you work to get paid.' In other words, it's a services business of some sort. It scales on people coming to work each day. Not so coincidentally, it's the kind of new business that VCs generally avoid. Running this analysis is especially important these days, even on businesses that superficially seem to be about technology, where the potential to follow the entrepreneurial scaling path suggests taking the product road to market. It's at least worth running the case: 'What would happen if we used this to create a low/no-cost offering that in turn enables a sustainable services business?' If nothing else, you should understand the implications if someone else takes that approach. "