Last year's dot-com disaster and subsequent economic slowdown have made job jumpers skittish about changing employers. So much so that more of them are asking to see prospective employers' business plans, according to published reports and several experts on information-technology employment that I've talked to in recent months.

"People are asking better questions, smarter questions," says Eric Tenety, an executive recruiter at the Landstone Group, a New York City office of Management Recruiters International. Mr. Tenety, who specializes in placing senior-level executives in software companies, says he's currently working with a CEO who's taking financial due diligence to the nth degree. "The candidate is requesting to see the books and to have them audited before he signs on the dotted line," Mr. Tenety says. "That was unheard of 10 years ago."

The reasons for the extra precautions are obvious, given the numerous start-ups that are going under. But what good is a business plan if you don't know what to look for?

I asked venture capitalists for guidance. If you want to take a show-me attitude to your next job interview with a web start-up, who better to learn the ropes from than the people whose job it is to separate the eToys from the future Microsofts?

Learning Business Plan-speak

vFinance.com, a web site that links entrepreneurs with venture capitalists, offers a free business-plan template that shows, in some detail, the elements of a complete plan. Basically, the plan lays out a company's market, financial situation, products and services, and management team. It describes competitors and ways in which they differ, lists upcoming products and expansion into new markets, and explains the manufacturing, research and development, and marketing needed to produce and sell the company's products or services. The financial sections focus on past history (if there is one), the balance sheet, major income and expense items, and ways in which new capital will be spent.

But formal business plans are less common than in the past, so you might not be able to get your hands on an actual plan, says Chris Baldwin, a partner at venture-capital firm Charles River Ventures in Waltham, Mass. Mr. Baldwin's company specializes in early-stage investments in communications and software companies, with an impressive roster that includes names like Ciena Corp., Linthicum, Md., Westford, Mass.-based Sonus Networks Inc. and Vignette Corp., Austin, Texas. Mr. Baldwin himself has more than 15 years of venture-capital experience.

The trick is to ask questions that touch on the most telling elements of the business plan. One of the key factors, says Mr. Baldwin, is the company's burn rate: how much capital it is spending per month. Future rounds of venture-capital financing are key, too. "Probably the most important thing in this climate is [to ask] what are your demonstrable milestones that the company has to achieve to get a successful subsequent round of financing," Mr. Baldwin says. Such a milestone might be shipping the beta of a new product. "A new investor wants to be assured of how much risk is out of the bag," he says.

One especially revealing question involves what kind of income the company needs to break even. Income, which can include everything from sales revenue to licensing fees, is also a harbinger of a company's ability to attract new investment. "A company in cash-flow breakeven is a company that the public market is inclined to invest in," Mr. Baldwin says.

As for competitive positioning, if a potential employer says its key differentiator is price: "Ouch, that's hard," Mr. Baldwin says. The company is extremely vulnerable to seeing profit margins disappear if bigger competitors lower their prices. Far better to hear, for example, is that your suitor has a product that offers tenfold the performance of competitors and saves customers money, according to Mr. Baldwin.

Sniffing out product-development and R&D strategies, something venture capitalists also do, is another good way to gauge a company's longevity, Mr. Baldwin says. "What we actually do when we decide to fund someone can be distilled into this question: 'Are you a company or a product?'" he says. "'You're about to ship XYX product. What's next?'" A poorly conceived company might not have a good answer.

Other desirables in a projected employer's business plan, according to Mr. Baldwin, are:

• Projecting a large share of a midsize or large market, rather than a tiny share of a large market

• Having management that has worked in the same industry

• Having a traditional business model and a clear-cut technology advantage -- both of which are getting renewed emphasis in the technology slowdown

Know Who You're Talking to

For Howard Smith, senior vice president at First Analysis in Chicago, the first thing to analyze is management. And he ought to know, having personally worked on funding such late-1990s successes as Santa Clara, Calif.-based Exodus Communications Inc. and RSA Security Inc., Bedford, Mass. The answers you obtain largely determine whether a company can attract funding. "The most important thing that venture capitalists look for is management," Mr. Smith says. "Is there somebody there who is seasoned and who has built this type of enterprise? If it's a start-up, then I'm looking for someone who's been successful in almost everything they've done."

Mr. Smith also recommends companies whose market opportunity is "IPO-able": their niche is of such size -- say, $100 million and above -- that an initial public offering will attract sufficient attention, and competitors will be big enough to consider mergers and acquisitions. In addition, a history of strong growth portends growth opportunities for new employees, since existing staff will likely be moving up the hierarchy. Mr. Smith also likes companies with A and B funding rounds that are loaded with well-known venture capitalists.

If your dreams include a future equity stake, Mr. Smith says to look out for options schedules that list only the CEO and venture capitalists as owners -- though such information can be hard to get during job interviews. "That might tell you something about their willingness to share the wealth," he says.

Ask questions that test the validity of a company's claims about partners and customers. Some of the business partners named may only have issued a joint press release; look instead for evidence of joint development or other tangible work. The same goes for customer lists, says Mr. Smith. Some of the more impressive names may only be testing a single beta copy -- most have dozens of such irons in the fire -- and haven't made a significant purchase commitment.

Red Flags

In the end, the most useful information may be the one tidbit that tells you a company is not long for this world, and thus worth not another second of your precious job-hunting time.

"If there's not enough cash in the bank to last until the next set of given milestones -- that's a huge red flag," says Mr. Baldwin. Another warning sign, especially in today's capital-constrained climate, is a plan that requires an unusually large amount of future financing to reach breakeven. Mr. Baldwin's hypothetical example: "If you ask how much additional capital do you need to become a standalone firm, and they say, '$300 million.'" He notes, however, that the number depends on how capital-intensive a company's industry is. Larger outlays are appropriate in high-speed networking, for example.

Mr. Smith agrees that big-burn companies are tough to get funded. If a company is vague about its next round of funding, "I'd be worried," Mr. Smith says. And watch out for a company with huge office space and only minimal plans for filling it.

Is it poor etiquette to ask such seemingly private questions? Mr. Tenety says generally, no, though the practice is more common and accepted among executives, who have more to lose from a bad move and soon may be privy to the information anyway. Still, in today's difficult climate, almost anything goes.

"The things we've been talking about, they ought to be able to answer," concludes Mr. Baldwin, though he agrees that junior-level hires have less leverage than senior managers when asking for specifics. On the other hand, people who ask such pointed questions can create the impression that they understand a company's business.