Bob Norton, founder and CEO of AirTight Management, has been a serial entrepreneur for more than 30 years. In that time, he's seen startups launch, grow, succeed and fail. It's given him insight into what commonly trips-up entrepreneurs' and their first ventures.

At the pre-seed stage, investors want to see that a startup has identified a specific pain point in the marketplace, something that's a small niche that can grow into a big business over time, but not so new and unique that most buyers don't understand that they need you.

"There's an old saying in venture capital: I'd rather be in the business of selling aspirin than vitamins," Norton says. "They want to see that pain and not have someone able to prioritize because you're probably replacing something else, which requires culture change."

The next consideration is whether the team is the right fit to move the company forward.

"That's really two things in one because it's the experience of the team held up against the problem they're solving," he says. "And I've seen pitches where the CTO is a brand-new college grad. And that's just a non-starter. Any CEO that thinks that's acceptable is not going to raise outside funding ever, especially if it's their best friend from college. Everyone likes to say, 'Oh, yeah, but Sergey Brin and Google and have these ideas. Every one of these were you look at it and you peel it back they brought in adult supervision and very experienced people with gray hair or no hair like me over time to build out and round out the experience of the management team."

Another concern is that most people believe that their idea is worth something

"I can tell you your idea is worth absolutely zero," he says. "It is only when you put together a team, a business plan and begin to build a product that you create value for your pre-money valuation of the company. The idea is worth nothing. It's like a spark and no one's going to invest in a spark. They're going to invest in a fire where there's already value."

He says even a patented idea you can mathematically prove is probably only worth 5 percent of the business because patents get a royalty on the technology. But the company's value comes from salespeople, operations, finance and marketing people driving a return on investment.

"A product is often only 20 percent of the business as a whole," Norton says. "Once you're in an operating mode and have early revenue or get to growth mode, the product becomes less and less important than properly executing marketing. There are loads of examples where superior products were killed by superior marketing."

Norton spoke on the Smart Business Dealmakers Podcast about what investors really look for in a pitch, the team and the concept, as well as where most entrepreneurial ventures stumble and fail. Hit play below to catch the full conversation.