Venture capitalists are in the business of risking money on whether or not a business owner will be successful. One of the best VCs in the country describes the traits he sees in the owners that make it — and one big trait that spells disaster.

In an interview with the Harvard Business Review, VC Larry Cheng of Fidelity Ventures explained what his company looks for — and what are the indicators of success — before handing over backing to entrepreneurs:

• They know how to prioritize. The people who know how to take an idea and turn it into revenue also know what’s important and what isn’t. Then they focus and put the important stuff in the center of the radar screen. That doesn’t mean they ignore everything else; it just means they know what comes first.
• They like what they’re doing. Unsuccessful entrepreneurs typically dwell on an idea that seems to have the most money-making potential, even if it means doing something they hate. The successful people think what they’re doing is fun — even when it just looks like a lot of hard work to everyone else.
• They understand “the problem.” Good entrepreneurs see the world as a set of problems — problems that are ready to be solved. What awaits are solutions, and someone who’ll make money developing them. But first comes the understanding what the problem is.
• They have courage. There’s no substitute for the willingness to take measured risks. That doesn’t mean successful entrepreneurs are reckless. It means once they have a belief in a good idea, they carry it through, even though they know the perils.

And the biggest blunder …
What Cheng sees as a precursor to failure is a tendency to have too many ideas and to bounce around from one to the other. Entrepreneurial types tend to be people who have lots of ideas; the successful entrepreneurs know how to pick out the good idea and ride it.