ORA-01031: insufficient privileges upon instance startup

Very good link: http://it.toolbox.com/blogs/david/ora01031-insufficient-privileges-upon-instance-startup-13759

He then proceeded to creating his instance using the following command:

oradim -new -sid InstanceSID -startmode m -pfile C:\location_to_pfile\init.ora -intpwd password

After which, the instance was created. He proceeded to creating the database itself. Since he was all keen about doing this manually he opened up a Windows CMD and did the following steps:

C:> SET ORACLE_SID=InstanceSID
C:> sqlplus /nolog

SQL*Plus: Release 9.2.0.1.0 - Production on Wed Dec 13 10:18:27 2006

Copyright (c) 1982, 2002, Oracle Corporation. All rights reserved.

SQL> conn sys/password as sysdba

Connected to an idle instance.

SQL> startup nomount pfile=C:\location_to_file\init.ora;

ORA-01031: insufficient privileges

SQL>

As you see, he got an ORA-01031. He didn't understand what is causing this. His O/S user was a member of the ORA_DBA group. He tried logging off windows and then logging backup in. Nothing.