Live coverage of ad:tech San Francisco by David Shabelman.

After a while (keep in mind I’ve been here for all of a day and a half), attending presentation after presentation at a conference can become tedious, especially when you don’t have a vested interest in what is being discussed (other than being paid for blogging). That’s why it was especially enjoyable to attend a presentation where panelists provided practical ideas for how start-ups can cope with the recession.

Panelists tackled a number of hot-button topics for the current environment, among them layoffs and salary cuts. Most stressed it’s important to hold on to your key employees and reward them accordingly.

Andy Grosso, a partner at Riviera Partners, said an across-the-board staff layoff of 10% of the workforce will also “spook” another 10% of the employees, who will begin to look for another job. Most of the panelists agreed that it’s not a good idea to penalize the top employees by cutting salaries across the board. Those employees who are essential for the products the company is working on should be compensated accordingly.

James Slavet, a partner at Greylock, said companies should not be making so-called “press release” hires, or people who look amazing on paper based on experience, but more on someone who is up-and-coming and looking to make their mark at a company. Slavet also said the founder or CEO should not be overly focused on treating everyone equally during tough times, but should work at making the “exceptional people” happy. Instead of spreading stock around to all employees, give it instead to the three or four most important people.

In the current environment, CEOs should not be afraid to pull the trigger and let go of employees who are not working out.

Rajeev Goel, co-founder and CEO of PubMatic, an online advertising optimization company, said a rule of thumb he uses on whether to keep someone is, “knowing what you know about the [employee] now, would you hire them now.” Can’t get much more straightforward than that.

But companies should work harder during the hiring process so they don’t have to make tougher firing decisions down the road. In other words, hire the right person in the first place.

Tim Chang, principle at Norwest Venture Partners said companies should keep digging for information about a potential hire and keep asking follow-up questions during an interview to determine if someone is right for a job. Along the same lines, Bijan Marashi, CEO and co-founder of e-mail enhancement application Xoopit, said companies should not be afraid to bring someone back for a second, third or fourth interview. And Grosso said employees don’t check references enough.

As far as saving money, panelists recommended outsourcing non-essential IT services not e-mail exchange services and data center services. However, none were fans of outsourcing services such as advertising sales.

For those companies seeking funding, the VCs also had some advice.

Slavet said some start-ups are telling him things they think he wants to hear, such as a hot business model like virtual goods. He said it’s critical not to have a business model “tied to where the wind is blowing,” but to be true to the long-term market potential and invest in that. Also, he said businesses these days are over-emphasizing how frugal they are as the headline of their pitch instead of the opportunity of the business. Focus on why your market opportunity is exciting.

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