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updated 7/30/2012 3:16:10 PM ET 2012-07-30T19:16:10

A longtime investor in technology startups, Esther Dyson jokingly refers to herself as the " Internet court jEsther." But with Flickr and del.icio.us on her list of successful investments -- both companies were sold to Yahoo Inc. -- Dyson is an investor big industry players take seriously.

As do the entrepreneurs she invests in. Dyson is an investor and board member in tech firms Meetup, Eventful.com, Boxbe and Voxiva, as well as consumer genetics startup 23andMe. She also has a passion for spaceflight and aviation, which has not only led her to invest in companies in those industries, but also to complete cosmonaut training and entertain dreams of becoming a space tourist.

We sat down with Dyson to discuss what makes a successful tech entrepreneur -- and what doesn't. What follows is an edited version of our conversation:

Related: Foursquare's Dennis Crowley on Building a Massive Community

Entrepreneur: How do you know a great new business idea when you hear one?
Dyson: The job of an angel is not to pick winners, but to pick potential winners and help them become winners. I invest in things that excite me because I'm putting in my time, as well as my money. So I want to spend my time on things that are fun. I want to invest in things that I think ought to exist. 

Entrepreneur: What qualities make an entrepreneur great?
Dyson: A lot of people now are building products, not companies. A company is an organism. You really want to build an organization where everyone feels that they are a member of the team, knows what the company is trying to do and understands their part in it.

Entrepreneur: What's an entrepreneur's biggest pitfall?
Dyson: Getting distracted. Running out of money. Thinking that you are the market. It's not that you need to be perfect, but you need to know what you're not good at and compensate. If you're not a CEO, find someone who is, and then they can help you realize your vision. If you are a CEO, find people who are better in specific areas than you are and let them do their thing.

The best description of a leader I ever heard was from Vittorio Cassoni [a former senior executive at Xerox]. He said: "I absorb uncertainty." I thought that was perfect. Leaders take away the uncertainty, the doubts for people. You absorb the responsibility and then you let people do their very best job. But you're the person who takes the blame if you didn't get it right.

Entrepreneur: What have you learned going from startup to big company?
Dyson: It's painful. It's like watching your cute nine-year-old become 14. When you have 10 people, you don't need policies; you need flexibility and you need people producing. When you have 100 people, you need policies.

And inevitably you have to deal with people who grow and who don't grow. With luck, you have some really wonderful early contributors who don't like big companies, and they go and do their own startups.

Related: HTC's Cher Wang on Innovation and the 'It' Product

Copyright © 2013 Entrepreneur.com, Inc.

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