Fledgling, start-up firms are often hungry for resources to catalyze their growth. For such firms, Venture Capitalists (VCs) offer a double-edged sword. On the one hand, the unique resources provided by VCs offer the start-up substantial benefits at a stage when such resources are critical to its evolution. On the other hand, the VC's control over such critical resources can enable it to extract substantial rents ex-post. We develop a theoretical model to show that the start-up's choice of the financier balances the benefits from combining the idea with the financier's resources against potential expropriation by the financier. First, we show that though an entrepreneur has to cede greater ex-post surplus to a more resourceful financier, the benefits from allying with such a financier dominate these costs. Second, while increased ability to replicate the idea adds to the start-up's value, it enables the financier to extract more rents, thereby shrinking the entrepreneur's equity value. Third, greater complementarity between the financier's resources and the start-up's idea enhances (destroys) start-up value when the idea is relatively easy (very difficult) to replicate; thus greater complementarity may be a boon or a bane for the start-up. This paper contributes to the literature on financial intermediation by highlighting the role of a financial intermediary as a provider of key resources. Theoretical work in financial intermediation emphasizes largely the role of financial intermediaries in overcoming moral hazard and adverse selection problems. Specifically, in the context of active financial intermediaries such as VCs, theoretical work emphasizes the role of VCs as providers of advice to the startup. In contrast, this paper examines the role that active financial intermediaries such as VCs play in building new companies by providing them critical resources. We argue that financial intermediaries as resource providers impose costs on startups as well – their control of the critical resources also enables such financial intermediaries to extract considerable surplus ex-post. While the empirical literature has documented the benefits of VCs as providers of resources as well as the costs from the same, this paper represents a first attempt to analyze the trade-offs that startup firms face when working with resourceful financial intermediaries. Our approach thus attempts to integrate the task of financial intermediation to the role played by key resources in the growth and development of a firm.