As the founder of a startup myself, and the recipient of funding, I believe it depends entirely on the nature of your business, and most importantly the market that the business is entering into.<p>Each new business must consider<p>a). the critical mass they need to achieve to reach a market and
b). the velocity they need to run at to meet that time of opportunity.<p>These 2 considerations will often determine whether externally (VC or Private Equity) funding your business is necessary. If you attempt to enter into a market place where all of the players (new and existing) are heavily funded, you will probably fail to penetrate regardless of the quality and performance of your product.<p>On the other side, if you gather funds to support your business in a field that has limited margins, or is slow growing, then you may fail to achieve the returns that your investors are looking for.<p>So - it all depends - but you need to make a decision based on the facts in your business plan.