Joel Spolsky has an interesting article questioning the necessity of venture capital in new businesses. I like the cut of his jib – much of what he says mirrors my observations from working for startups for the last five years. If you can possibly make it without taking VC money, I think you should. Any company that has the possibility of bootstrapping themselves should give that a shot. If that requires frugality, so be it. You have a much better chance of surviving if you aren’t forced to meet short term profitability goals by external forces.
The article has an appendix of references, including two weblogs by VCs, Venture Blog and Joi Ito. I’ll be checking those out. I’ve already seen Startup.com, a pretty realistic look at the startup world. At least, it is aligned with what I’ve seen of it. Parts of it were strongly cringeworthy as I’d seen all those mistakes in my own career.