I spoke with Rick Heitzmann at September's Vator Splash event and he discussed some of the sectors that have dominated this year, as well as some of the sectors that have guttered out.  According to Heitzmann, the strong sectors this year have been gaming and virtual goods, while traditional enterprise software and any businesses that require a big check up front have fallen by the wayside.

Other startups that haven't fared so well, according to Rick, are those that work as great features, but don't really make solid companies.

When considering a startup to invest in, Rick looks for passion and whether or not the issue that the startup is addressing is a minor, occasional nag or a real pain.  The startup should be a "Tylenol" rather than a "vitamin" (I suppose the more health conscious pro-vitamin viewer could reverse that order).