Ben Popper offers a great tip about giving a demo of your startup's software:
Software is Magic. A Demo is a Magic Show.
It's worth adding that this applies to demo videos too, and in fact to any sales process.
I've made the point before that you should sell the emotional benefits first. The "Wow" moment in your demo is what gets emotions engaged and captures attention. Make sure that happens up front to capture your audience's attention.
What if your software doesn't do anything magical? If your software doesn't do anything that seems magical to someone, then the only way you're going to sell it is if you have a captive audience (for example, if it's in-house software built for a large corporation). But if that's the case, chances are you're not reading this article.