Investing in venture capital is a numbers game, and it’s one that I like to describe as something like buying a season ticket.

When you have a season ticket to a sports team, you go to every home game that they play. You’re there for everything, and you don’t have to miss out on any of the action all season long.

Smart venture investors operate the same way.

The Ewing Marion Kauffman Foundation in Kansas City tells us that, “an investment approach across multiple companies can lead to attractive returns,” and that typically means investing in a core portfolio of at least 20 different startup companies. Some will do well, but the bulk of them probably won’t.

But that’s OK.

Maybe two out of that 20 will really take off and grow exponentially, returning many times your original investment and more than making up for those that don’t return. Investing in the season ticket approach ensures that you’re there and invested in those two superstar companies, without missing out.

Beyond that, the way that VCs make a lot of money is when, when something really emerges strongly, they pour a lot of money into that. They use their participation rights and double (and triple) down on their winners by investing more and more in later rounds as those companies grow. Those investments are more expensive than in earlier rounds, because the company’s value has gone up, but also it’s a lot less risky because by then the company has a proven track record and has a lot of momentum.

It’s a more expensive season ticket at that point, but it’s worth it.

It’s like buying a ticket to the World Series. You have to pay more for that series than for a few game somewhere mid-season (or even the entire season ticket, depending on the team), but you know the experience will be worth exponentially more in the end. There will be a winner in that group. It’s no longer a question of if.

Spotting the winners

It’s like going back to fifth grade and trying to determine, at the time, who is going to be the highest performing person from that class. Who is going to go on to great things? Who is going to start their own company? Who is going to really make an impact on the world?

It’s almost impossible to tell at that point.

But usually once people get to college and out into the workforce it starts to show up. That’s where the eventual Supreme Court nominees and CEOs are clearer.

The season ticket concept is just like this.

Early on, it can be difficult to tell which companies are going to succeed. But overtime, as they grow and start generating revenue, it becomes easier to spot the eventual winners. That’s why you want to invest in as many promising companies early on and then narrow down your investments in companies as they grow to focus on the top performers.

Once you see one of your portfolio companies generating real momenting, that’s when you want to go back and invest 2x, 3x your original capital in them and ride the wave.

Access matters

Of course, it isn’t easy.

Investing in later rounds, when the winners are clearer, isn’t a matter of walking up and saying I want in.

You can’t.

If it’s a really good deal, space in those later rounds is reserved for the investors that participated in the company’s earlier rounds. They have participation rights that other investors don’t have access to.

You can’t just walk up and buy World Series tickets either, because if it’s a really good matchup the tickets will already be sold long before you ever even get a chance to buy some. The season ticket holders of both teams have already snapped up all the seats.

That’s the key for venture capitalists.

Early round investments are essentially the cost of buying that season ticket, and gaining access to big, world-changing companies before the hit it big. Because at the front end is it’s very hard to pick. Just like it’s very hard to decide which fifth graders is going to be successful.

But someone will break out. One of those kids might be a billionaire. So might one of those companies.

That’s why you have to invest in a lot of them. Don’t try to pick. The season ticket will be worth it no matter who wins.