As an extension to last week's column, I asked Brad Feld of SOFTBANK Technology Ventures and Rick Patch of Sequel Venture Partners just these questions. What follows are their answers.

Keys To A Successful Internet Start-Up

What Brad looks for:

• Top-notch team that understands the customer's needs and knows how to get to that customer.
  
• Entrepreneurial vision.
  
• Ability to recruit great people.
  
• Recurring revenue models.

What Rick looks for:

• Product risk that is quantified up front and has been reduced.
  
• Interested customer base, preferably one that has prepaid.
  
• Good Management - Much of the management team already on board or identified, that trust each other, have a solid vision, walk together, and have a good leader.

On Great Ideas And People

The general consensus is that good ideas are second to good people. Or, as Rick says, "Ideas are a dime a dozen and a Margarita at the Rio." In fact, there is more money available than there are good ideas.

Agrees Brad, "I'd rather invest in a questionable idea from someone I know, rather than a great idea from someone who is questionable."

The bottom line is this: What really matters are the people -- finding the team that can put the ideas together. "I would rather invest in an 'A' management team with a 'B' idea, rather than a 'B' management team with an 'A' plan," Rick adds.

Philosophies

What's the philosophy behind a truly successful company? According to Brad, it's all about people. It's pointless to attempt any endeavor if you don't enjoy working with the people you are working with.

The best companies also:

• Are open with what their goals are and what they want to accomplish.
  
• Are loyal, honest and chock full of integrity.
  
• Focused in their commitment.

Adds Rick, "Quality deals are the ones with the best management. The management team needs perseverance, a sense of humor to balance the tension, a singular interest and no multiple visions."

VCs sometimes function as little more than 'glorified headhunters,' says Rick. A primary function of their work is to match people with the right teams, offering information to them regarding the things they should be aware of.

"The management team becomes the competitive advantage in a technology business," says Rick. "Whereas your technology can be duplicated, your management team can't. In addition, customers that like what you're doing add to your market advantage."

What else do the best companies have in common? Plenty of sweat equity, and the management's willingness and ability to work hard.

On Profitability

With drastic losses logged quarter after quarter by many internet companies, I was interested to hear that profitability only becomes important when analysts and investors see it as important.

Current internet stocks are valued on their so-called land-grab potential - their market position and amount of real estate they own. Earnings are not as critical when what you are really building is an established market position.

"If you don't spend ahead of revenue, you miss opportunities down the road," says Rick, adding, "And once you become profitable, you can't go back."