"You've got have to have more than an idea, you've got to be narrow and focused, so that people can understand exactly where you're trying to be," he says. "You've got to be more defined, and planned out as to how you're going to go and get some sales, and you have to be realistic on how long that's going to take. And you have to have some idea as to how long and how much money it's going to take to get you to self-sustaining levels."

If you're having trouble nailing down your projections, you may need to bite the bullet and either do research, or else find some money to spend on those things. Without it, you'll have to accept lesser valuations because of the greater degree of unknowns, says Bernie. "But almost anything in technology ... you know there's IDC, and Forrester and this and that .. Yankee, there's a lot of stuff around. Unless you're discovering something new, you can find something."

Financing at the concept stage will be extremely difficult. What are the chances of two guys with an idea and no product yet who are looking for money – a common reality in '99-2000 - getting financed today? "Forget it," says Bernie.

A company should have a product in place – software, telecom, wireless or something like that – and it should be virtually finished .. prototype at least, says Bernie. "And hopefully they may have had 1 or 2 validations from some potential customers or a couple of beta sites or something, or their first couple of customers. A validation would be that someone likes it enough to test it, like IBM or a certain kind of customer ... just so that you know that somebody at arm's length, a third party, sees enough potential to use it themselves or sell it in turn themselves."

It helps if the person at the table has a proven track record. But if you're not that kind of person, if you're someone who has been a good manager or done something in the past, you need to give the impression that you know exactly what you're doing, that you can run a business, says Bernie. You need to show that you know the big picture, but can get down to work, get things done and assemble a team.

Investors are also now looking at how a person is likely to react if things get tough, says Bernie, wanting a comfort level that the entrepreneur is not going to go ballistic or let his ego get in the way.

"The toughest part is transitioning these businesses - even the good ones get to the point where the founder runs out of steam," he says. "Everybody can't take a company from zero to $200 million in sales. They just – people aren't built that way. There's the guys that start them up, and then the guys that take them from $25 to $100 [million], and then the guys from $100 to $500, and $500 up. And so everybody should realize who they are – or you hope that you are dealing with someone that knows who they are and realizes that if it's not working maybe they should step aside – God, just to save their stock position. I've had to I guess transition maybe half a dozen CEOs or founders and it has rarely been easy."

It is hard to give up control, and the VCs and funders are going to be more cognisant of planning for that ahead of time, says Bernie.