[jbduler]

Look for signals. Pretty simple: the caliber of the CEO, CTO or the caliber and experience of the VP Eng. Then look at the VC's funding the company, and the names of the partners on the board. If top tier VC (say Sequoia, Benchmark, or A16) invested in series A after having invested in seed, then you are good. VC's can be be wrong for sure but they have done a ton of background checks on founders, the tech, why customers would buy, etc.. There is no way you can do as much and have as many contacts. Ignore vanity signs such as "Fancy Advisors", they bring next to nothing. Same for "Fancy Big Client", just a free test on some ancillary product. Good luck

[akchin]

In general this is good advice. However I would advice against depending too much on VCs. They don’t really get it right a lot of the time. At the end of the day it is the caliber of the team, the sales/customer acquisition strategy and the competitive dynamics of the market and the position of the company within this market. So the first part about judging the team is valid. The answers below about asking questions about sales/acquisition is very good. Depending on the stage of the company, you should also ask about profitability or if there is a clear path to profitability.

Also don’t shy away from asking challenging questions...such as competitors etc. and be wary of a CEO who is dismissive of challenges. You should get a well thought out answer.