For clarification, electing S Corp status is an IRS status *only*, it does NOT affect your legal formation at all. Underneath, you remain the same LLC or Corp you were before the election except to the IRS. It can absolutely be beneficial, but there are also rules and restrictions which must be followed to keep that status.
You can, of course, take in capital as an LLC. However, it typically will involve blocker corps and the like, which have an administrative expense for the VC. This *will* limit the number of VCs who are willing to invest in you. It also means there will be a greater legal fee for the investment, so overall, be prepared to pay a higher transaction cost for the investment, just fyi. Lastly, if an LLC is successful and very profitable, the benefits can actually flip, whereby a C corp at a 35% tax rate is actually in a slightly lower bracket. A nice problem to have, though, obviously.
In short, LLCs can take outside funding, but it's not quite as simple or cheap as when a C Corp. Also, you can elect to be an S corp when either an LLC or a C Corp (and unelect just as easily, btw) without having ANY impact on your legal formation.