Business Intelligence

Playing It Small Doesn't Mean Not Making Money

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Executive Summary

Skewed expectations present a major risk when accepting venture capital. Most venture capitalists expect to make a lot of money, and they expect the company they help to become billion-dollar ventures. David Heinemeier Hansson, partner at 37signals, compares this type of risk to putting all of your money on red five in a game of roulette. When you build a business that earns a million dollars per year, you're taking a more calculated risk, analogous to that of a skilled poker player who steadily builds up his winnings. "The fact of the matter is that a million dollars is a lot of money when it goes straight into your bank account," asserts Heinemeier Hansson, partner at 37signals.

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