Where you acquire funding from may not just be as simple as how much money you are looking to raise. Your initial round of funding sets the precedent for all future rounds. Who you take money from and understanding the consequences is critical. Chris Dixon, CEO of Hunch, recently wrote on his blog about pitfalls of accepting money from the "wrong" entity. Discussed here are the difference between VC and Angel money as well as what to watch out for when accepting seed funding. Here’s the roundup:

VC or Angel, Don’t Approach The Wrong Source - Brad Feld outlines guidelines for whether you should be approaching a VC or Angel investor. From the amount of money you are looking to raise to the type of company you are building, these factors determine whether to approach a VC or Angel. - Entrepreneur

Taking Seed Money From Big VCs - If a big venture firms isn’t "following on" with their initial seed investment, that can cause serious problems for the entrepreneur. Even if a VC wants to follow on, Dixon says, "you are likely to get a lower valuation