"Here are some of the key ingredients. It's really basic, but here they are. For us, you've got to have something that's proprietary, which eliminates a lot of competition. You have to impress me with your ability. If you haven't done it before, [then] that what you've done in the past you've done well and that you're a leader. And on a chemistry basis, you can handle the difficulties ahead and I'm going to be able to deal with you in the rough spots."

Chemistry in a financing deal? You bet.

"Chemistry is getting very, very important .. between the two people. It's a marriage," he says. "When things are good everybody can have a good time, you can be partners and be buddies. But when times are tough, instead of snapping at each other you figure out – so we've got to work together. So there has to be that really good affinity and chemistry, both ways."

A market with global, sustainable margins are also a must. "If you're in a business and people see right away that it will be a commodity, forget it. You think you're going to get a dollar for it today and it will cost a dime; well, if it's a commodity in 3 years it will be 15 cents. So you've got to have that kind of opportunity."

You also need to know how you're going to go about getting it, and how much money you are going to need to reach the point where you don't need any more money, he says. "So if you have 5 or 6 of those things, you've got a rough shot."

"Another point I should make," says Bernie, "is that whole issue of valuation. Don't worry about valuation as much. If you think you've got a good deal get the money, get started, get in the game. If your deal is good enough at the end of the game you'll probably have enough left for everybody."

How can you get a deal in from of HDL Capital, for starters? "Very easy - get it on two or three pages. And if it doesn't jump off the table when the guy reads it – forget it. That three-pager's got to get you the meeting. If you can't communicate well enough in three pages to tell me what you want to do, and why I should meet you, I can't help you," he says.

There is no doubt that the heady days of the 1999-style, free-flowing capital are gone. But solid deals, and serious entrepreneurs will still have a chance at raising money with a solid plan and a well-constructed deal. If you're looking for money do your homework, put together a solid plan, and get ready to start throwing your pitches.

Part 1: Venture Capital: Financing Early Stage Deals in 2001
Part 2: Revised Financing Requirements: Back to Basics
Part 3: Recession worries?
Part 4: Making Contact