The "Back to Basics" approach - with a demo as part of it - is the route to take, says Ranjit Padmanabhan, co-founder and VP of products at MashLogic. That means: Clear articulation of the value proposition and its differentiation from existing solutions; a well-reasoned financial model; a distribution strategy (traffic, usage, retention, monetization); competitive analysis; and have the product as far along as possible, but ideally a demo.

"The product should do something non-obvious, demonstrably better than the incumbent, without requiring behavior changes on the part of the user," he says.

On the point about citing the competition, entrepreneurs who know they have the right stuff shouldn't be nervous. "A bit of competition seems to provide market validation, especially if the space has also received funding," says Padmanabhan. "For that reason it is beneficial to list competitors in your presentation, accompanied by a clear analysis of why you are more likely to succeed."

Importantly, Padmanabhan says you'd better have a compelling response to the questions, "Why is this a product and not a feature?" and "What if Google decided to build this?"

He notes that you can use the semantic label-but with care-to help VCs quickly categorize the nature of the product. Andraz Tori, CTO and co-founder of Zemanta Ltd., says that if you need to, you can play the semantic web card as a cost-savings factor - i.e. getting the well-organized data on the cheap). "If you are in specific industry where data exchange or integration is a painful issue, semantic web might play a role in commoditizing the space," he says. "Overall my advice would be to concentrate on other strong points of your startup and mention words "semantic web" only on the technology slide."

Everyone agrees, of course, that VCs want to see a clear monetization model and growth path. How clear? Radar Networks founder and CEO Nova Spivack puts the figure at bringing in $100 million in revenue in four to five years. Having a technology that is not easy to replicate-and patents or trade secrets in support of that-is helpful to your cause, he says, but better is to show a proven business model and demonstrate, using conservative assumptions, that you'll be bringing in money to break even in a set period of time, say 18 to 24 months.

Also on the money side of things, "the most important thing to every VC right now is that you have a low burn rate," he says - on the order of $100,000 or $200,000 a month for a completely new, pure startup, or about double that for a somewhat bigger player.

And, says Padmanabhan, be advised that the prevailing mood is that the availability of open source and cheap infrastructure requires lower levels of investment, so entrepreneurs should be prepared for tighter valuations. "This gives some VCs the capacity to spread their money among more investments, which in turn can benefit a larger number of entrepreneurs, especially at the seed stage," he says.

"There are different kinds of investors and entrepreneurs," says Spivack - the adventurous and the risk-averse, the optimistic and the skeptical - and problems occur when there are mismatches in philosophy and approach between them. While it can be good to have people with different views as a company matures, in early stage start-ups you don't want a lot of polarity. Have the same goals now and later on you can bring in diversity, he notes.

Spivack recommends looking for VCs who really understand aspects of the technology, and who themselves have been operators of one or more ventures so they understand what it's like to be a CEO. Ideally, they will have operated a consumer company if that's the space you're in, or an enterprise company if that's your area. Also, you'll want a VC who's not so busy with so many other ventures that they can't give yours the attention it needs. "You want to know when they did their last investment and how many boards they are on to make sure they can help you," he says.

"VC firms will tell you they all have different value-adds, but the truth is they are all basically equal," he says. "Money is money. The difference is the personality of the people, it's what the people are like and you must get to know them and make sure you are productive as a team, because that's really the management team of the company. It's a hard but important decision."

And even if you are the kind of business that gives it the potential to qualify for VC funding, there may be reason to wait. In the current climate for raising institutional capital, especially for seed-stage startups, VCs are pickier about their investments and seem to prefer companies that have market traction, while demanding more aggressive valuations, says Padmanabhan. "I would definitely recommend that software startups go as far as possible (e.g. product launch, guerilla marketing, creative PR, etc.) without seeking VC investment," he says.

"If you can bootstrap you should," agrees Tori. "Among other benefits, that's the best way to raise VC's interest." If you fall into that niche category, Tori thinks the possibilities are open. "As for the niche solutions, it depends," he says. "In Europe there are big research grants that enable semweb companies to stay alive while looking for their killer app. However, this can become a trap of never getting out of 'academic incubation period.' You should get in front of the customers as early as possible and then tune your product so it fits to more and more customers."

The best way to proceed, Iskold also believes, is to "build the product, get it out there. Do it with limited resources, self-financed, nights and weekends. VCs are not going to be writing checks for ideas and [Powerpoint presentations] anymore."