I agree. They want to see the walls, building, and product before investing. Plus, they are going to want controlling interests in the organization. As the company grows, the Board of Directors could potentially vote you out of your executive position, and bring in their own team. How would you like that?
Without more details -it`s impossible for me to give you any input or ideas specific to your project. There are many different ways to bring capital into a company. The first step is to choose the direction that offers the optimum chance of success. This often involves dealing with the many " funding myths" that are accepted as fact.
I agree with some of the thoughts and sentiments given in response but the reality is venture capitalists come in all shapes in sizes.
There will be some that need to see customers lined up, physical assets etc and prefer later stage investments and there are others prepared to invest in earlier concepts.
They do not always insist on controlling interest...in fact many VCs like to invest alongside other VCs as a way of pooling the risk and commitment.
VCs often have a focus on one or a few industries...but most focus on the following criteria to some degree or other when examining potential investments...
Size of Market / The Exec Team / Signs of Traction (Customers etc) / Competitive landscape / Barriers to entry (i.e. means of protecting your market from competitors)
Believe it or not $1.5M is not that much money...look at boutique VCs...perhaps local to Arizona or Angel Rings...i.e. angels who invest as a team...another way to get the $1.5M.
BTW, a VC just joined my site looking for entrepreneurs to support...don`t know if she is focused on Arizona or your space but might be worth a look...