Got access to a couple million bucks and want to be a venture capitalist? A miner of start-up business gold? Then get used to being wrong.
That's one lesson we learned during a discussion with Venture Capitalists at the Reuters Technology Summit: even the most successful investors -- those who finance the bandwagon others jump on when it comes to the likes of Facebook, Myspace and Twitter -- meet with entrepreneurs, like what they hear, write a check, and watch the investment go up in smoke.
Rich Wong, partner of Accel Partners, an investor in social networking site Facebook and mobile advertising network AdMob, the rate of picking winners is much like baseball batting averages, where top players like Joe Mauer, Albert Pujols or Ichiro Suzuki do not get a hit 7 of every 10 times they come to the plate.
You can bat .300 or .400 and you are doing really well (even though) you are wrong a reasonable percentage of the time.
So how do I know where to invest my million? For sure, it takes heady research and years of experience, but sometimes its about a vibe. Wong says: