What VCs Look for in Startups

My younger brother is in his final year at HBS and had as a guest speaker today a partner from one of the oldest and most prestigious venture capital firms. Here’s what the partner said they look for in startups:

1. Does it create value for customer and will they pay for it
2. What is required for strong execution of the idea
3. Who comprises the team
4. What’s the valuation and is there a big upside

One key aspect is that he didn’t directly mention the market as one of the four items. I believe you need a good management team but that a great market is more important than a great management team. That’s right, I’d prefer a good management team with a great market over a great management team with a good market.