Gordon Ritter, the founder and general partner of Emergence Capital Partners, is one of the top venture capitalists in the on-demand space. Besides being the original VC in Salesforce.com (NYSE: CRM), his firm has also funded companies like SuccessFactors (Nasdaq: SFSF), HireRight (Nasdaq: HIRE) and Lithium Technologies.

Well, last week I had a chance to meet with Gordon and we talked about what grabs his interest when an entrepreneur makes a pitch.

Of course, he wants a company that has a big market opportunity (say $1 billion) as well as a qualified team (or, at least, there is a team identified).

True, these are typical things. What else is important?

"What we find that's critical is that a company has shown an ability to build a relationship with customers," said Gordon. "It doesn't have to be a lot of customers. Instead, we want to see evidence that the company is engaging customers."

Unit economics is also key. "What are the customer acquisition costs?" said Gordon. "Is there a low-cost access to leads? We also want to see a short sales cycle."

Something else: Gordon wants a team with strong domain expertise. "On-demand is getting verticalized," he said. "In a way, it's about selling knowledge.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates MergerBook.com.

MOST NOTEWORTHY: DealerTrack, Healthcare Realty Trust and the employment services sector were today's noteworthy initiations:

• Suntrust believes DealerTrack (NASDAQ:TRAK) is in the stages of significantly increasing penetration of dealers, finance companies, and aftermarket providers with its leading suite of transaction and subscription based solutions. The firm started shares with a Buy rating and $61 target.
  
• Jefferies resumed coverage of Healthcare Realty Trust (NYSE:HR) with a Buy rating and $28 target, as they believe the company is well-positioned to benefit from the superior long-term growth trends for outpatient services.
  
• Credit Suisse initiated the employment services sector with a Market Weight rating, citing economic uncertainty and downside EPS risk. The firm initiated Manpower (NYSE:MAN) with an Outperform rating and $73 target and HireRight (NASDAQ:HIRE) with a Neutral rating and $13 target.

OTHER INITIATIONS:

• CVS Caremark (NYSE:CVS) was initiated with a Market Perform rating and $45 target at BMO Capital.
  
• JP Morgan initiated Plug Power (NASDAQ:PLUG) with an Underweight rating and California Pizza (CPKI) with a Neutral rating.

MOST NOTEWORTHY: Quicksilver Gas Services, Hireright, DaimlerChrysler and Masimo were today's noteworthy initiations:

• AG Edwards initiated Quicksilver Gas Services (NYSE: KGS) with a Buy rating and $26 target as the firm believes the company's distribution growth has high visibility, based on its current asset base and the possibility of third-party acquisitions. UBS initiated shares with a Buy rating and $34 target.
  
• Hireright (NASDAQ: HIRE) was initiated with a Market Perform rating and $13 target at Piper Jaffray, as the firm believes the company's distribution growth has high visibility, based on its current asset base and the possibility of third-party acquisitions. CIBC is positive on Hireright's extensive solution set and strategic alliances and initiated shares with a Sector Outperformer rating.
  
• DaimlerChrysler (NYSE: DAI) was started at Bear Stearns with an Outperform rating. Following the Chrysler transaction, Bear expects Daimler to raise its margin guidance now that the company can focus on its truck platform.
  
• Masimo Corporation (NASDAQ: MASI) was initiated with an Outperform rating at Piper Jaffray, as the firm believes the company's "best in class" technology will drive continued pulse oximetry share gains. Cowen initiated shares with a Neutral rating on valuation and Deutsche Bank started shares with a Buy rating and $30 target..

OTHER INITIATIONS:

• TD Newcrest started shares of Vitran Corporation (NASDAQ: VTNC) with a Hold rating.
  
• Lazard started shares of E-House China Holdings (NYSE: EJ) with a Buy rating; CIBC initiated shares with a Sector Outperformer rating and $25 target.
  
• Rodman & Renshaw initiated shares of Iomai Corporation (NASDAQ: IOMI) with a Market Outperform rating and $4.25 target.

Will Google out-staff Yahoo! by the end of the year? Wall Street analysts from UBS have crunched the numbers and say that Google is hiring more than Yahoo!:

• Google had 1,800 open positions, up 125% year-over-year.
• Yahoo! had 800 open positions, down 14.4% YoY.
• Current headcounts for Google and Yahoo! are 6,790 and 10,098, respectively.
• Last year's hiring numbers for Google and Yahoo! were 800 and 935 respectively.

I'm not sure I agree. Without more data points, it isn't reasonable to forecast out based on growth rate in open positions since Yahoo! is exhibiting negative growth. 

Assuming a 100% fill rate (confidence interval will be fairly high in that Google placed 2nd in Fortune's MBA wish list), then the implied growth rate for Google will be 26% vs Yahoo!'s 8%.