Johannesburg - Backing from a venture capital firm can seem like a wish come true, but the flip side can resemble a pact with the devil. That's if you're being asked to part with control of your precious business.
Look no further than the moral at the heart of the upcoming feature length movie called The Social Network, about the founding of social networking site Facebook.
Facebook's founding investor, Eduardo Saverin, tells of how his initial investment in the billion dollar giant - pitched at 30% in return for assuming a business development role - was diluted to just 5%, after venture capital was injected.
Saverin was also squeezed out of making operational decisions.
This is the nightmare scenario many entrepreneurs face when they consider releasing shares in the business in return for funding.
Closer to home, Nic Haralambous, co-founder of Motribe, a technology business which has just been backed by 4 Di Capital, had similar concerns as he and partner, Vincent Maher, sought out a venture capital partner for their business.
"It's not just about money at the end of the day," says Haralambous. "Contrary to what people believe, money is the easy part.
"Building a long-term partnership with an investor that you trust is the difficult part, and I think we've managed to get it right at Motribe with 4Di Capital," he told Fin24.com.
Eben van Heerden of venture capital firm Powered By VC points out that venture capital is not a passive investment but an active one, in which the venture capital brings value to the party beyond its financial investment.
"Young businesses often do not have the in-house skills and business experience to facilitate high growth and here the VC team will play a key role in assisting executive management," he says.
"By definition, the VC team gets actively involved in each investment mostly on a strategic level, but sometimes the situation also calls for operational interventions."Do you measure up as leader?
Van Heerden adds that one of the key considerations his firm takes into account is the leadership of the company.
This assessment will also include an evaluation of the likely ability of the entrepreneur to progress from being the original ideas person to becoming a manager and leader, as these attributes will be key for the successful future growth of the business.
"If we believe that there is a real risk of an entrepreneur not being willing to partly give up control, we will likely abort the investment prospect. The same goes if we believe it is unlikely that the entrepreneur as the original 'ideas person' would grow into a manager and leader, and would not be willing to step aside to work alongside a new CEO," he told Fin24.com.
Tech and finance entrepreneur Rory Mackay, however, has a word of caution for investors who may be sucked into giving up control in return for some venture capital funding.
"In South Africa, you can get very far without going to a venture capital firm and this is one of the benefits of boot-strapping your business and not letting control too soon," he said.
For him, a major problem is that entrepreneurs feel they need money to live on, and so go for funding to subsidise this while they get their business off the ground.
In contrast, many entrepreneurs in the US build their businesses after hours until they have a pretty big company, he says.
Mackay also urges entrepreneurs to make a careful scrutiny of exactly what the venture capital firms are contributing, and to not just accept glib promises of professional management and "networks".
Tom McKaskill, a leading global venture capitalist, believes there is another area where good professional advisers can add value to entrepreneurs, and that is around packaging a product or business which can ultimately be sold or exited.
"In my experience, there are few professional advisers who understand how to position a sale on strategic value," he writes in his book Invest to Exit.
He notes that bringing in strong advisers can make the world of difference, but the entrepreneur needs to know where they fit in the process.
He writes: "The key to the use of such professionals is, however, to use them to assist the investor and internal management team in the process, not to take control.
"Too often business owners have allowed professionals to control the process and the negotiations, not recognising that their primary motivation is the commission on a quick sale."