Mercer Island resident Greg Gottesman has successfully invested in startups for 20 years. So what does he look for in a startup idea before he writes a check?

Greg Gottesman was in his late 20s, married, and living on the East Coast when his wife, an attorney, suggested the couple move back to their hometown of Seattle to pursue their careers and start a family. A graduate of Stanford University, Harvard Law School, and Harvard Business School, Gottesman was considering a job at Goldman Sachs when, in 1997, he flew to Seattle to interview for (and eventually land) a job at Madrona Investment Group.

“During that time, sort of the early days of internet technology, there was just a frothiness to the market,” said Gottesman. “The returns on those early investments were just absolutely spectacular. The more we were invested, the more we were having success, and the more people were coming to us with their plans. It kind of built on itself.”

Gottesman and Madrona Investment Group survived the infamous Dot Com boom and bust. Gottesman became a managing partner at the company, which is the leading venture capital firm in the Pacific Northwest (early investments include companies such as Amazon, Apptio, Impinj, Redfin, ShareBuilder, and dozens of others).

Six years ago, Gottesman also co-founded Rover, the nation’s largest network of pet sitters and dog walkers.

His latest endeavor is Pioneer Square Labs, a startup studio he co-founded in 2015 with Geoff Entress (an early investor in HootSuite and Big Fish Games), Mike Galgon (co-founder of aQuantive, which Microsoft purchased for $6 billion in 2007), and Ben Gilbert (a former Madrona colleague).

“This is a dream,” said Gottesman during a recent meeting at Pioneer Square Labs’ third-floor headquarters — a spacious, brick-and-timber space filled with standing desks and walls of windows offering views of the company’s namesake Seattle neighborhood. In less than two years, Gottesman and his team have helped launch four businesses, offering new solutions in the home-buying, tax-preparation, immigration-processing, and advertising fields. “The idea that we can sit around and talk about new ideas and work with entrepreneurs on new companies that could disrupt existing industries or change the world in some way  — what’s more fun in business than that?”

Gottesman recently reflected on his career in startup investing, what he looks for when considering the next great idea, and what excites him about startups and new technologies.

Gaining strength by knowing your weakness

 “The number-one thing I’m looking for is just great entrepreneurs. I love entrepreneurs who are exceptional at something, but they also know where their weaknesses are, and they are not afraid of that. Self-awareness is an underappreciated trait because no one is great at everything. But to be a truly great entrepreneur, if you are self-aware enough to know where you are strong and where you need some help, that’s a huge advantage.”

Field of knowledge is key

“It’s great to have some experience in, or domain knowledge about, a space. If you spent your whole life in games, it’s hard to then go build an infrastructure enterprise software company or a biotech. It’s just hard to make that transition because you don’t know where the ratholes are.”

Vet the entrepreneur

“I tend to call people that have worked with an entrepreneur in the past and just ask, ‘How is this person to work with?’ I don’t think most people do that enough. You learn so much. Even if the person is great, they will give you a sense of where they are strong and where they are weak, and that’s always super-helpful.”

Be great at one thing

“If you can be the best in the world at one thing, I usually think you have a better shot to ultimately build a great company. Most technology is crowded, so when you are going out into the market, in order to really separate yourself and get some early validation, you need to be truly great at one thing, something very specific. If you can go out to a customer and say, ‘You’ve got a problem, and I can solve whatever that specific problem is better than anyone else,’ then that’s a great launching point. Where people make mistakes sometimes is that they try to be good at a lot of things instead of the best at one thing. And that one best thing can be smaller than you might think.”

Regrets, he has very few

 “As I look back on investments, the ones that I regret the most are when I bet on an idea and I didn’t really believe in the management team. Those are the horror stories where you might even have a great idea pursuing an interesting market, and the team either doesn’t execute, or maybe lacks integrity, or isn’t aligned with the investors or with trying to do right by the company versus themselves. Those are the hardest ones. The ones that failed, but I really believed in the team and the people, I don’t regret because I know that those entrepreneurs gave 110 percent.”