The bigger question I have is what does the VC money earn you, besides taking away more ownership over the company that doesn't make a dime yet (as opposed to a bootstrapped product idea) ?
How much?
Why do they need money at all especially for a web startup?
Oh, I don't know... maybe the founders want to pay themselves a salary so they can work on the project full-time and still pay rent/electricity bill/car payment/mortgage payment/gas bill/car insurance/phone bill/etc. And as cheap as computing cycles are, they still aren't free. Sure, a small Slicehost or Linode node for development is dirt cheap... but what if your webapp traffic starts to grow and you need to scale it out? Or maybe there are expenses for traveling to trade-shows, conferences, customer sites, etc? Maybe you want to buy advertising or pay a PR agency for some work? Maybe you want some graphics designed by a professional graphics designer? There are all sorts of things that go into running a business that cost money.
The bigger question I have is what does the VC money earn you
Runway and the ability to move faster. If I'm trying to bootstrap something, the amount of code I can produce in, say, 6 months, is equal to how much code I personally can write in that time. If I can hire, say, 2 more developers, we can - in theory, and allowing for Brooks' Law - get a lot more done. Getting done quicker, maybe getting a certain feature finished in time for a big-splash product launch at an important trade show, etc.; are places where being funded would give you an advantage over pure bootstrapping. Obviously this won't apply to everybody, and not everybody chooses to pursue VC money. Different strokes and what-not...
Maybe the OP is only familiar with the negative aspects of taking outside investment, and is perfectly comfortable with bootstrapping (and has a venture that can be successful with bootstrapping alone). Given that, it seems that it might be fairly difficult to see why people would take VC money.
Yes, I tend to be a bit sarcastic by nature. Too much time spent watching British television and hanging out with Brits, I suppose. Or maybe it's just genetic, who can say about such things.
Actually the original post struck me as almost a bit trollish itself, although maybe I just misread it. So yeah, maybe my response a bit snippier than usual. <shrug />
FWIW, I'm bootstrapping my own startup at the moment, and am very leery of taking outside capital. But I'm certainly open to the possibility if the situation dictates it. The thing that would be nice, would be being able to work on the project full-time, not just nights and weekends (outside of the $DAYJOB.) That's the one area - in particular - that makes it very tempting to start trying to raise money.