One thing I've found that I can do to better understand what VC's are going through is to do a little homework assignment: Put myself in their shoes. Assume VC firms are just made up of people who are making rational decisions for their investors. What indicators would I use if I were going to invest some money in several early stage companies?
In no particular order just off the top of my head, here is my list:
1. Do the founders seem committed to this or might they just give up if things don't go well next week?
2. Do the founders seem competent?
3. Does the idea seem plausible?
4. Is the idea one that could generate a lot of money and thus an ROI?
5. Are the founders resourceful?
6. How much do I trust the founders? This is where a strong reference really helps.
7. Has the company demonstrated any traction in their market?
Not too surprisingly this matches pretty closely with what VC's are generally understood to be looking for. I've most certainly read about these details time and time again, but it never really clicked for me until I put myself in their place and wrote it out in my own words. If you have a few minutes to spare, give it a try yourself. What indicators would you use to choose who to invest in? With this knowledge how can you now present yourself as someone that a VC would want to invest in?