Investment increases your risk
This is the crux of the argument:<p>"If you raise funding, however, it cuts out a number of the middle options. VCs will definitely want an exit, and if the exit is too low, this can turn a fairly decent success into a relative failure for the entrepreneur."<p>However, in my experience (which is now fairly extensive), this scenario is a vanishingly rare one.<p>Raising a lot of money can certainly be dangerous, but not for the reason Daniel thinks.  The big danger in raising lots of money is that you'll spend it-- that you'll let this pseudo-success (with investors rather than customers) go to your head, ramp up your spending before the company is ready, and then put yourself into an impossible position later where you've burned through the money and need to raise more but haven't achieved the results you'd need to do so.<p>In other words, venture funding is dangerous in the same way any power tool is.