20Million-Dollar Gamble

Aim for Agile Funding of your business with small batches, small budgets, and keeping multiple options open.


Imagine going to a casino with a friend. Together, you decide to pool your resources because you believe that the combined efforts will increase your chances of winning big. However, your friend insists that you play exclusively on the roulette wheel and he wants to bet only on a single number because the payout, when you win, will be huge. There’s just one important difference between you and your friend. For him, it’s only 1/40th of his gambling budget and he plays the same game with 39 other friends at 39 other tables. For you, it’s not just your entire gambling budget. It’s all the money you have. Now, how do you feel about betting on a single number?

This is the feeling you should have when you take money from a venture capitalist (VC). The business model of VCs requires them to make many bets on potential unicorn companies, businesses that grow to be worth $1 billion or more. They spread their funds over lots of startups and then push all of them to be the next Spotify, Zalando, or Revolut. Anything less than that is not very interesting for them. Sadly, maybe only 1 out of 40 startups becomes such a unicorn company. Most of the others falter, wither, and die.


When you take money from venture capitalists, their agendas need to align with ...

Get Startup, Scaleup, Screwup. now with O’Reilly online learning.

O’Reilly members experience live online training, plus books, videos, and digital content from 200+ publishers.