Is Acting and Venture Investing Similar?

An actor is an artist. He wants to entertain people. That is his passion. He is not chasing money. He provides entertainment to people and they pay him for that value he has generated for them. Money was a by-product of the services(entertainment) he rendered to the mass and each of them paid a little bit and voila he is rich.

Every sensible actor would want an Oscar-winning role. He wants to only do the greatest movies. He wants to be in movies that are blockbusters. An actor who is famous gets to choose roles and characters and directors as they approach him. But when he starts his career, if he says I will only do oscar winning roles and he is relying on acting to feed his family, they will starve to death.

One, you do not know whether the movie will be a blockbuster and you will get an Oscar(someone else could have done a better job). The story and director might be good but the movie could still be a failure. The actor could have thought he could do justice to the role but the final product could be bad. The movie could get stopped halfway due to financing reasons or the director got paralyzed. The uncertainties are numerous.

So at best as a starting actor, what you can do is do as many roles as possible, make a name for yourself, hope that Clint Eastwood or Martin Scorcese liked you in those roles you have already done and picks you for the greatest role in their next movie. And maybe that movie is a success and you do win an Oscar and become a successful actor. And once you are very successful, you still get picked for great movies or you bankroll them and you get lucky to keep repeating the success, again and again.

Venture investing is almost the same thing. There is no venture investor who knew that Google or Facebook would be what it is today when they invested. They look at multiple founders, ideas and put money into all or many of them based on some information edge and then they pray that one or two out of a hundred becomes a unicorn.

They love investing, finding new ideas, working with founders and when all those investments become a success he gets paid a percentage of returns for making that early bet. Their investors give them money to manage based on past returns and if they are good at picking winners.

Mathematically to make venture investing and acting as a career is very hard. It is a game of high variance. Most of them are duds but in between a few will give astronomical returns. That is why there are only very few great actors and great investors who have stood the test of time. The luck part or divine intervention comes in when you are able to get the success early in life. Then you can absorb the shocks of failures in between and retool and make successful things later in life. If your initial years in acting or investing are failures, it will be very hard to sustain and survive.

So to sum up, great actors and great investors are not Gods. They have done this again and again or practised what they do decently well. If they are focussed they do have a chance of high success. And on top of that, the successful ones who got to the top are the ones that got lucky many times in their career.