Well, the demo is not everything. According to this article, you must also be able to change ideas and trains of thought. What good will a demo do if you are ultimately going to change your train of thought and move on to something else?
It is my understanding that the application process puts less initial weight on the demo than the application itself (based on the text preceding the application itself). However, Justin says that a good demo is the key to acceptance. Should a good application not come first, based on the wording of the application?
I have to say that this concept is unfounded on many levels. Case and point being that the basis of a good partnership is a good friendship. If I meet someone on the Internet, my first thought is that they are not who they say they are.
There is no need for social networking to extend to the business concept on this level. If you can not find a founder in your town, in real life, then start a business yourself. Either that, or don't start one at all.