PHOENIX, ARIZ. (Business 2.0) - The bad skits, the technical flubs and the cool products and services are all here again at Demo 2006, which kicked off on February 7.

Demo is the Sundance Film Festival of technology startups. Conference director Chris Shipley and her staff hand-pick 70 companies, which each get six minutes to present their products to an audience of fellow techies, venture capitalists and the press. Then they wait to see if the investments, sales and cover stories roll in.

An early favorite to grab investors' interest was Blurb, a San Francisco-based company that turns anything digital you've got—photos, blog entries or poems—into a slick hard-bound book. CEO Eileen Gittins calls the process "slurping."

Venture capitalists seemed eager to slurp up a stake in the company. Gittins has already raised more than $2 million in a first round from Canaan Partners and Anthem Venture Capital. And as she chatted up visitors to her conference booth, at least three VCs sidled up and handed her business cards. "They are bombarding me," she said to a friend. Blurb is already planning a second round of fundraising to make room for new investors.

One of the coolest presentations came on Wednesday from the Multiverse Network, which has developed a platform to easily and more cheaply build massively multiplayer online games. The company's pitch is that we could all soon build our own World Of Warcraft or Everquest, and see what kind of community populates it.

The longest line of the show was at the free ice cream from MooBella, which offers a Linux-powered vending machine. MooBella's device can create a custom-configured ice cream sundae in 45 seconds. Think of it as Dell meets Cold Stone Creamery.

Not all of the presentations went over so well. Here's a tip for would-be entrepreneurs: Don't insult your audience, especially if you're trying to get money from them. Gary Little, a partner with Morgenthaler Ventures, sat near me for the morning session. Little is a man with a sense of humor—and he's someone a startup should be glad to have as an investor.

But he did not crack so much as a smile as presenters made joke after joke about his fellow venture capitalists.

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