Venture capital takes ownership away from you; do you really want to do that?

It was 1999, at the height of the boom, a few months before the bust of April 2000 so he can be forgiven. I stood before a crowd of entrepreneurs gathered at a hotel on Route 128 in Burlington Massachusetts. They'd each paid $550 to come hear the collective wisdom of bankers, other entrepreneurs, lawyers, accountants, and venture capitalists. I was the keynote speaker and before me stood a twenty-something entrepreneur with that look in his eye.

The look said it all. He had the idea. He was going to solve the problem. He was going to be rich. All he needed was the capital to make his idea, putting free postcards in the checkout aisles of supermarkets; postcards that were really ads, graphically-enticing, hip images of Entenmanns's chocolate donuts and Tony the Tiger, but nonetheless ads. He stood during the Q&A period and he told his story as a prelude to asking his question, the question.

I braced myself:

"So, even though I'm cash-flow positive, I can't even get a meeting with a VC. Why is that?"

I blew out the air from my lungs and surprised him with my response. "Why do you want to sell half of your profitable business?"

In 1999, though, I knew the answer to my question. After the huge run-up in the value public companies, companies that had been backed by VCs, entrepreneurs came to see venture funding as a requirement, the key to that elusive golden door behind which all happiness lay.

I went on. "Look. this is your first business, right?" I turned to the audience, most of whom were in their mid-forties and fifties, "How many of you have run businesses before?" A few hands shot up. I zeroed in one guy, your typical gray-haired exec. He told us his first business, his current business, was manufacturing specialty airplane engine parts. He'd launched the business in the late 1970s after he'd left Grumman.

"And how did you raise the capital to get going?"

He smiled; he'd just finished paying off the second mortgage he'd taken out to get going, he said.

I looked at the parts manufacturer, pointed to my young questioner still standing in the dark room, and said, "And what would you have done if your business had low-initial capital requirements and was cash-flow positive from the get-go?"

He, and a bunch of his peers, burst out laughing. My young entrepreneur was still puzzled.

I tried to explain. "The best possible way to finance

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