The main point is, they are keeping hidden what they are really thinking. Right: They like the project and the founder, the connection with "real world" problems, etc. All total BS. They want more "proof points" -- mostly BS.
What they don't want to do is what the founder had to do -- deeply evaluate the promise of the project now.
What they really want to see they didn't mention but is in one word, significant and rapidly growing 'traction'.
What's going on? The venture partner is working for his limited partners, and they think much like traditional private equity investors or just commercial bankers. So, the limited partners really want their venture partners to make financial investments only in measurable financial assets. The limited partners would greatly prefer there to be audited financial statements, but in a pinch they will let their venture partners settle for a surrogate measure, 'traction', from, say, Comscore or some such.
If a venture partner is especially curious, then they may want to try the app or Web site. Why? Mostly to keep up their "deep domain knowledge" but otherwise to evaluate how millions of users might like the app or Web site. If such an evaluation looks good beyond belief, then they might make a seed investment.
That's just how the venture capital business works.
Is this narrow focus on 'traction' and essentially ignoring everything else working? At least on average, over the past 10 years or so, apparently not. Or as in a recent post at AVC.COM, on average, the venture capital ROI figures have been significantly less good than an index fund.
The fundamental gap is 'planning': Can we plan a project, execute essentially the plan, and with high batting average get the intended results of the plan or at least significantly high ROI? That's the fundamental challenge. And mostly in venture capital, the answer is "No". That is, the industry does not take such planning seriously.
Is all such planning so hopeless? No: Quite broadly in our economy and technology, we can plan and then execute the plan with reasonably high batting average. Even for projects that appear to be highly technical, original, and 'innovative', there can be some good early evidence of the good or bad prospects of the project. Project selection is important, and there are means of selecting good projects with reasonably good batting averages, averages much higher than in venture capital.
But back to the limited partners: They still want to think like private equity people or just commercial bankers. They just do. And, instead of changing, they will pick venture firms more carefully or just invest less in the 'venture capital asset class'.
But just now for the most interesting part of venture capital investing, 'information technology' based mostly on just software, the venture capital 'business model' is under attack: The reason is the recent and astounding ratios of price and performance for computer hardware and communications bandwidth and also the powerful infrastructure software available at least initially essentially for free. So, for a startup based on software, computing, and the Internet, the path to the coveted 'traction' is just one or a few guys living cheaply and typing quickly. Then, with such low 'burn rate', once they get the traction, and especially if their traction is growing very rapidly, they stand to be nicely profitable already or soon and, thus, no longer in great need of equity investment and likely reluctant to sign the usual term sheet and subordinate themselves to a Board controlled by venture partners. So far this threat to venture capital has not a lot of examples and maybe no examples of really big wins, e.g., another Facebook, but the threat is coming like an 80,000 pound 18 wheel truck at 80 MPH just 50 feet away.