Venture capital is a high risk, high reward industry. A venture capital company gathers large sums of money from investors and deploys that cash as funding to startups that make it through a vetting process.
Is venture capital funding right for your organization? The answer is dependent upon several factors such as your end goals of the company and your current funding situation.

Venture Capital Screening Process

VC firms get thousands of business plans and hundreds of pitches every year. They don't have time to sit down and have a pleasant conversation with each and every company that needs funding. Simply getting the chance to pitch to a venture capital partner means either your business plan is really on point, you are getting a lot of good press elsewhere, or you have a connection. If you get an invitation to present you can expect a brutal process that includes an intense interview / question & answer session. Those that do not impress do not get funding.

Venture capitalists require such a high standard and have a rigorous process because there are millions (or billions) of dollars at stake and the failure rate for startups is incredibly high. A VC firm is doing well when 7 out 10 companies they fund fail, 2 have somewhat successful exits that are profitable, and 1 exit that leads to a huge profit.

Is Venture Capital a Smart Way to Fund My Company?

First, the likelihood of getting significant amounts of funding without a viable product or service, or at the very least progress toward a working demo is small. In short you shouldn't rely on VC funding to get started.

A major consideration of accepting a round of venture capital funding is you are likely going to be required to give up significant amounts of equity and/or control of the firm. It's the ultimate trade: the funding, press, and business expertise a round of VC funding provides you could make your company the next Google. Owning 50% of the next Google is better than owning 100% of your small fledgling company.

But right now you are your own boss. You've grown this company from inception to its current form. Are you ready to give it up for adoption? What if taking venture capital funding means you no longer are the CEO of the company? All the decisions on strategic direction of the company could be made by the new VC-installed CEO, even if you disagree.
Expect the VC firm to install some, if not all, new members on your board of directors. Your current board has stayed true with you through thick and thin, and all may lose their board seats.

Another consideration is your end goal for the company. Do you really believe in your product or service? Are you building something that could change the world? Do you want to stay involved and take market share (or create a new market) step by careful step? Or are you looking to build something quick, ramp up revenues, and sell for a nice payoff?

The answers to all of these questions will guide your decision as to whether or not to pursue venture capital funding.