Good background information from Fred Wilson on “The Ideal First Round Term Sheet”, he refers to a post by Chris Dixon (cofounder of Hunch), who I candidly asked (on Chris’ blog) if he’d consider a board member position for a would be venture. Fred’s post: http://www.avc.com/a_vc/2009/08/the-ideal-first-round-term-sheet.html
Of note, Fred Wilson mentioned Delicious had 100k users per month and wasn’t officially formed into a business structure when Union Squares invested in them. I think getting a functional tool & site, and building a user base would go a long way to helping us build investor confidence.