I was watching a great talk from Ben Horowitz given at UC Berkely and in part of his address he covered the subject of what he as a VC looks for when he is considering investing in a tech startup.  Really interesting and worth mulling over if you’re considering a startup or plan to raise finance at some point for your business.

What Do We Look For?

• The size of the opportunity
• The quality of the team
• A bad market always beats a good team.

Other Things That We Like …

• Megalomanics.  People who really believe they can change the world and have the hubris to try.
• Outliers.  Things that are different and unexpected.
• Shifts in technologies or markets (eg SSD in the storage market)
• Market sectors that are dead (eg when Yahoo dominated search and Google came along)
• Entrepreneurs who are hyper competitive and will tilt at a big market vs going for a protected but smaller niche.
• Hard core technical team.  The company needs to be in dire straights if they leave.
• Products then teams rather than vice-versa

If you’re interested in viewing the entire video, here ya go.