Do VC's still have a role in Micro Ventures?

Many of the businesses that I classify as Micro Ventures could have been funded back in the crazy late 90s. However nowadays VC’s are probably a lot more conservative. The fact as well is that VC’s are probably not what you need when you are starting out. See Forget VC Money, Fund Yourself! at Inc.com, for more about why it isn’t always a good idea.

That said, VC’s still very much have a role. Let’s say you found a couple of partners for your startup. During the first year you’ve managed to prove you have a business model, but you’ve mainly been going for the geek/early adopter market. You think you can take your idea and reach a much larger market, but you need more money for marketing. Now it would be a good idea to call in the VC’s. At this point you have a lot of evidence to show to them. Their job of doing Due Diligence will also be a lot easier. Best of all you should now be able to negotiate a much better deal.

Update: Just noticed that Brad Feld has a great new article Bootstrapping Top 10 List. Jerry Colonna also writes about Bootstrapping