Someone on Quora asked me a question regarding my investment criteria for K9. I figured it would be good to cross post the response here as well.

I use the following necessary, but not sufficient filters to qualify the startups I look at for investing through K9 Ventures:

1) Technical Founders: Founders with the ability to build their own product and have the potential/inclination to lead the business. The team must not only be able, but have the utmost integrity and a strong willingness to consider the advice and feedback they receive.

2) New Technology or New Market: The product must involve some kind of new technology or a new market. Not interested in me-too businesses.

3) Direct Revenue: The company must have a way to getting direct revenue from its customers (I deliver value to you, you pay me). No three-way business models and no content, media, advertising-based companies.

4) Capital Efficient: Ideally companies that need a Seed and Series A, but potentially may not need a Series B or Series C round of financing. Companies that can get to revenue and cash-flow break even quickly.

5) Hyper-local: The entire team should be located in the SF Bay Area. No distributed teams, no overseas teams, and definitely no companies that rely on “outsourcing” to build their core technology.

I generally stick with these qualifying criteria and don’t deviate from them. Also, remember that these are the qualifying criteria (necessary, but not sufficient). Even if your startup meets all of these criteria, that doesn’t mean that I/K9 will invest. These are the objective criteria, the rest is subjective and often comes down to a gut call. I do, however, reserve the right to have exceptions to these qualifying criteria, typically in cases where I’ve known the founding team for a long time, and therefore can relax one or more of the criteria since it’s more than made up for by other factors.

If there are any questions or clarifications, please feel free to ask in the comments and I’d be happy to respond and/or update this post accordingly.

You can follow me on Twitter at @manukumar, or, follow @k9ventures for just the K9 Ventures related tweets.