Here's a succinct comment by marketing guru Seth Godin on funding companies. Every entrepreneur thinking about funding a business ought to read it.
"Don't," he says.
Inevitably, investors invest in entrepreneurial endeavors because they believe in the endeavor and in their ability to make it disproportionately better if they are involved. So, absolute and total control ends with the investment. If this doesn't work for your business, don't take investment money. Will investors fund companies that are really not appropriate candidates? Sure. There is plenty of money in the world. Go read up on The Balance Health Stores and you'll see an example of investors who diverged from founders on the issue of growth. On the other hand, the right investors in the right situation can be unbelievably powerful and of immeasurable benefit in an entrepreneurial company. (Anybody see the Wily Technology deal in early 2006 for one example of how it ought to work?) See Bob Zieserl for examples of what works.
Are most companies appropriate for investment money (meaning venture kind of money?) No. Probably 95% are not. Doesn't make them poor businesses or bad ideas. It makes them, as Seth says, "freelance ventures." I parted with a partner once over that issue. He wanted to be a critical worker in every project and I wanted an entrepreneurial business that grew disproportionate to my personal labors.
Are cash flow deals good ideas, as Seth says? Well they certainly can be. Often the patient, small cashflow payback investor is someone you know and the capital is their own. (Most venture investors, like pro golfers, are playing for someone else's money and they have time limits on when they must get the money back.)
The real gem here, though, is that comment about the economics. If the deal won't come out economically, it is the market telling you it's not a great idea.