While browsing today, I noted that 9Rules had a post on the topic of a recent offer of venture capital funding that they turned down. Much as Nick over at TW hates anything to do with search algorithms or research papers, I'm not a big fan of the Web 2.0 craze (a term I still don't fully grasp, but already despise), but I certainly understand their perspective. While VC money may free up time to pursue projects you truly love, they also take away ownership and often enforce guidelines you're not comfortable with.
Many years ago (in the heady days before 2001), my company was searching for VC money for our own projects (which would have been a bad investment so it's lucky we didn't get any). Today, we've entirely rejected outsider funding and have been operating on our own earnings - it's the only way to ensure true quality and vision control. Kudos to 9Rules - it's not easy turning down a jump in the quality of life and security, but they've clearly got the ideas and strength of character to make a go for it on their own. I heartily approve.
Another alternative is raising capital through an Angel instead of a full-fledged VC firm. Generally they have less say in day to day operations and most understand there is more risk involved. Of course, the money isn't generally as much as you'll get from a VC either.
It really depends on business you are in. If the products are digital, then the little gray cells and time are the most important assets. However, with physical products and services going ahead and developing without any VC is really painful and frustating (unless you happen to be a millionaire).