02/21/2013 04:49 pm ET Updated Apr 23, 2013

How Being a Venture Capitalist Is Like Being a Hollywood Studio Executive

It's Oscar season, which makes us nostalgic for the fall of 1991, when the two of us took a high school film class together. Something clicked and we spent far more time than required producing our movies. Fast forward 21 years, and the two of us are still close friends, but one now lives outside LA and makes his living in the movie business, while the other is a VC in Boston. Yet we often find ourselves talking about how similar our jobs are. Here are five reasons why:

1. WE SEEK BOLD NEW IDEAS. We both get pitched, whether it's by a producer with a hot screenplay or by an entrepreneur who will revolutionize an aspect of enterprise IT. We both scrutinize the concepts to see if they are worth backing. We also search on our own for talent, inspiration or ideas that could become hits. We each place a high premium on ideas and people that are creative, unique and bold. In the venture world, we also focus on scalability, the film equivalent of broad audience appeal and merchandising.

2. WE MATCH THE CONCEPT TO THE TALENT. Sometimes the success of a great film relies on the best pairing of idea and director. The same goes for business. The person who invented a new mobile platform might be a brilliant technologist, but not a visionary CEO. It's part of the role of the studio executive and the VC to ensure that the right leader is in place to execute the right idea smoothly, on budget, and on time.

3. WE DO EVERYTHING WE CAN TO ENSURE SUCCESS. What if an actress flakes out or a product is not hitting its development goals? We are there to help, oversee, nudge, challenge, protect our financial investment, and to approve some of the bigger decisions. Sometimes you have to replace a director. And sometimes you have to oust a CEO -- but thankfully both rare occasions.

4. WE TAKE A LOT OF RISK UP FRONT TO ACHIEVE OUTSIZED RETURNS LATER. When our capital is invested, a film or business is usually in a very early stage with only a few of the critical pieces in place for success. We work intensely with the management team or film crew to complete the picture, so to speak.

5. WE EVALUATE LEADERS IN SIMILAR WAYS. Have we worked with them before? Do we have a good relationship? If not, it comes down to evaluating their experience, commitment and vibe. Sometimes a director or a CEO isn't hungry anymore; their desire -- or lack thereof -- to change with new market dynamics is a signal. They may have reached a stage in their career where they are less adaptable and unwilling to sacrifice to the degree required for success.

There are, of course, some ways our jobs are different. In the movie business you only have one chance to make the film the best it can be and will usually know that first weekend if it's going to be a hit or not. In venture a company can be retooled many times and it could take years for a solution to fully penetrate the market. The risks are also different. Only about half of movies make money, with studios hoping for a 50-plus percent return. VCs, on the other hand, have a much greater risk-reward ratio.

And there's one more thing that makes us different: the VC is investing in Lincoln to win Best Picture, while the studio exec is backing the project called Argo.