Personally speaking, I'm quite opposed to venture capital when it comes to software start ups.
I'd pick and recommend bootstrapping over VC every time. It's not just about the money, its about the mindset.
A bootstrapped company is out to make money from day 1. There is no cushion.
You're highly motivated to make it happen. It's all the right stresses and motivators.
Make money or quit.
I'm working on a project like that right now with a friend. We both have day jobs, and are doing this on the side. If someone came to me and offered funding I'd say no. It would hurt us more than it would help.
If you're thinking of a software startup, you need to check out 37signals.
Watch some of the videos on business: Presentations, Keynotes, and Interviews with 37signals
And read Getting Real. Getting Real: The Book by 37signals