Raising money is an entrepreneur's recurring nightmare. Startups burn through cash at an incredible rate. We have just started raising our second round of venture capital for zipRealty.com, our online real estate brokerage. This time around, it isn't as scary. At least, we know where some of the booby traps are. Round One turned out fine -- we raised $1.7 million from Vanguard Venture Partners and a group of angels lead by Barrington Partners. We made some costly missteps, though. Fellow entrepreneurs, I share with you our hard-learned lessons.

The first was the value of brevity. Our first business plan for zipRealty.com could best be described as a doorstop: 40 pages of text and 20 pages of financials. We started revising it after we had scheduled presentations to investors. Confusion ensued. We had so many versions of the plan that we couldn't keep them straight. I remember realizing -- on the way to a presentation -- that a copy had two page 12's and no page 13. We screeched to a halt at the nearest Kinko's, unbound the copies, and fixed the problem. Half an hour later -- in mid-presentation -- we realized that we had not put the final name of our company (it was code-named Miradore initially) on some of our early charts. Needless to say, no one whipped out a checkbook that day. We eventually got the plan down to 20 pages, though.

Investors don't like improvised presentations, we found. The day before one meeting, a group of potential investors asked us to bring along Ed Neiman, our director of operations, and Nate Brooks, our director of product development (both expert real estate brokers) to grill them on why any buyer or seller would use our service. Fair enough. Alas, with such late notice, we hadn't practiced our pitch. During the car ride down, I felt like an FBI agent on a mission -- handing out briefing sheets on the partners and copies of the presentation, which we only briefly reviewed. We bombed. The VCs asked questions we hadn't anticipated. We ended up making references to an Austin Powers movie and giving long-winded, inconsistent answers. Surprise! No dough from them either. That was the last time we went anywhere unrehearsed.

Once we got our act together, we started getting some serious interest. Near the end of the round, when we had commitments for 75% of the amount we wanted, we received a message from Don Wood, a venture capitalist with Vanguard Venture Partners. I returned his call expecting to get an answering machine. Instead, he answered it himself. I was stunned. There was no chitchat. He launched into a full interview with very tough questions. It went very well till near the end. I mistakenly called Don "John." Instantly the taste of warm shoe leather filled my mouth. I figured all was lost. Mercifully, Don let it go and scheduled a meeting with his team anyway.

It turned out Don had researched online real estate for six months and was ready to invest in the right team. Within two weeks of the first conversation, we had a term sheet from Vanguard Venture Partners. That was an eye-opener. We realized that if investors are excited about an opportunity and fear they'll lose a deal, they can move very fast. Luckily for us, we were ready by then. We closed our Series A round within two months. Most times, it doesn't work out so well.

Next Sunday, we release the second version of zipRealty.com's site -- a total upgrade. See you in two weeks. Next time, I'll show you how to buy or sell a house online.

Scott Kucirek is president and co-founder of zipRealty.com, an online real estate brokerage. The company's Internet site and online real estate agents let people complete the entire purchase or sale of a house via the Web. The company's Web site is www.zipRealty.com, and you can E-mail Scott at Scott@zipRealty.com.