Seth's got a great post today entitled: Q: How can we get our company funded? I couldn't agree with his answer more; Don't. After starting a handful of companies, all self-funded, I have always been scared half to death of losing control when the VC’s come calling with “attractive” valuations. I guess I’ve watched more than one friend lose control of their company because they bought into a vision of what some VC thought the start-up company could do.
That's not to say that raising money, in some situations, is necessary. If you must wait until the last possible moment.