I started a company grew it very fast and with it the appetite for multiple consecutive rounds. All cool and well - raise one of the largest angel rounds at the time and great A, B and C-rounds but at C I went below the 50% ownership mark. With that I was no longer in control, VCs took over and there was no way of steering the ship as caption bot only as mate. I stepped down because it was just not interesting to me, sold my shares (luckily) and three years later the company hot the wall. It was the only of the 5 companies I started where I made that mistake and the only one that failed in the end.
Keeping control is not about being a control freak but maintaining the ability to run a company as a leader not maintaining it as a banker. Investors invest in innovation to grow the capital - some however decide to invest to get the model railroad their parents rejected to buy and look for a toy not a capital growth opportunity.
Now - in the past 15 years that happened to about 5,000 Silicon Valley startups.
One of the more recent was "Get Satisfaction" a $100 Million exit - founders got exactly $0.00
Today I help startups to create a "Capitalization Strategy" early on.
Part of it is helping rationalize that any business stands on three columns:
* Sales & Marketing
The foundation is the team - the roof is the market. If you remove any of the columns, the roof (market) falls down and crushes the foundation (team)
For most entrepreneurs the product column is a nobrainer, the sales&marketing column a challenge and finance column gets pushed too far to the side.
getting crushed by VCs is usually not greed, they are not bad guys, they are not stupid either, but they simply got pushed over the 40% ownership line that was a golden rule to not cross for investors for over 200 years. What triggered that push - I don't know.