With start-ups appearing on a daily basis, how does an angel investor differentiate between a flip and a flop?

Here are some tips that might help entrepreneurs be in the flip side of the equation.

1. Begin by building something that people really want. In other words, know your target market.
2. Team + Team + Team + Traction + Revenue. The quality and experience of the team is key. With the well-known fact of “developer hopping” the investor wants to know how your team was formed. Have you known each other for quite sometime? Is your team diverse enough? Do you have the domain expertise required? What is your passion level? What is your vision? Do you hack for fun?
3. Traction: Does your product or service has enough traction in the marketplace? In other words, are you viral? For a typical consumer Internet company, investors might expect a 5% growth/week. This number should be sustained over months.
4. Bootstrap: Your minimum viable product should be bootstrapped. The days of asking for $500K to build a prototype are gone (unless, of course, you have wealthy friends and family).
5. Be realistic about your valuation. A pre-revenue highly scalable start up sits typically in the range of $1M-$3M pre-money valuation. Your positioning on this range depends on the quality of the team, the vision and the product traction. Product virality is key.
6. When hiring, consider waiting a year before you actually give equity away. Those who are truly passionate about your product will show commitment before expecting stock.
7. Be attached to the problem you are solving, not to the solution you are providing. This is the best advice I have ever received.
8. Pay more attention to your data and less attention to your ego. In this regard, read the story of StepOut (fka Ignighter). It is the perfect case study about the importance of paying attention to the data your customers provide everyday.
9. Study trends. It is essential to be strategic from day one.
10. Understand opportunity. We are moving towards a HCI (Human Computer Interaction) model. Ideas navigating in this space might have tremendous funding potential. Funding opportunities are also available for API-driven companies, that is, for those who establish a utility model for improving a method. Last but not least, the data-utilization space is very underdeveloped. Figure out how to use data pass just storing it. We currently store massive amounts of data that sleep in some server completely underutilized.
11. No... Angel investors don't require you to pay in order to pitch ! 

Always remember that investors are always thinking in fuel economics. How much fuel do I put in and how much output do I get? At almost $3.00/gallon, passion coupled with performance and efficiency are key.