I just found a great blog post on the topic of vetting a startup.

A few takeaways:

• It has to be more than a good idea
• What it boils down to is are people willing to pay for the service/product.
• In fact, have them hand over actual money
• In may not work for the “Twitters” of the startup world
• You’ll know that you’ll have revenue as soon as you have a working product

The blog post gets into more of the details, if you’re interested.