One thing that I'm looking at for a current project I'm working on is sweat equity. While we won't have cash to pay people in the near term, we can allow them to earn equity at a rate commensurate with their skills and the value they bring to the table. This way they can "buy-in" doing what they do best and have the opportunity to build equity over time.

As for valuation, while not all that practically helpful, the old adage something is only worth what someone else will pay for it holds true. If you were to sell the company right now what do you think you could get for it?

Without more details it is tough to answer specifically. But you should ask yourself can you stand to completely lose the amount of money you are investing? Is the startup engaged in something you are passionate about? Is it purely a financial decision and you are looking for a strong ROI or do you have other reasons for investing?

In my experience the sorts of "hard core" cold calling campaigns you are talking about are indeed ineffective. I prefer to cold call/mail only select individuals that I want to work with. When there is a genuine interest in talking to that person it is much easier to build up rapport with that person and develop a relationship. Often times for me these conversations don't lead to a sale but they are still valuable to me both personally and professionally.

There are also services like http://www.intelligentoffice.com/ that allow you to use their address as your professional address. They also provide secretarial services such as phone answering. I found their prices to be a bit expensive but for some companies a professional address is more important than for others.