Philippe Laferriere has an interesting post on the question on raisiing funds for start-ups. He extendeds on Loic's post a while ago.

Hers is his summary on pro and cons:

"Pros:

• speed up development through available budget for hiring, marketing, international expansion etc..., but manage the cash as if it was your own.

• external investors provide support, advices and ideas, potential partnerships..., but check the relevance to your business.
• brings tremendous market awareness and credibility, but the market will now your company is rich.
• discourage investors to invest in competitors, unless your competitor is better than you.

Cons:

• dilution of founder shares, but better off in a bigger company -- interest of job and financially.
• less freedom and control, but never expect total freedom anyway.
• potential risks with investors/funds agenda,
• time and budget required for raising and closing rounds, cost to get the pros
• time required to "manage" your various investors and complex board, cost to get the pros."