The $5 lottery ticket that changed how I think about funding
There are things a $5 lottery ticket teaches you that any millions of dollars in raised capital cannot. It was early in my career, during the final days of my first startup venture. We had $5 in the company account, and our taxes were due. My co-founder and I walked to the local convenience store and put it all on a scratch card.
Standing at the counter, ticket in hand, I realised something: traditional finance had forced us, as founders, to bet everything on chance. Banks wouldn’t touch us without several years of profits. VCs wanted unicorn odds – the kind you get from lottery tickets, not solid businesses. We were building something real, but real wasn’t fundable.
We didn’t win the lottery, of course. But three days later, we sold the company literally hours before having to file for bankruptcy. I stayed on, stabilising and rebuilding. Now the company had stable funding, combined revenue predictably soared from $5 million to $100 million.
Today, twenty years later, I see the same pattern everywhere. The venture capital model is designed to hand founders a lottery ticket and tell them to scratch. Win big or go home. Nine out of 10 companies will fail. Those are chance odds, not business fundamentals.
As CEO of Sinch, I held the coveted ticket. I scaled the company from $300 million to $3 billion in revenue, grew profits from $30 million to $300 million, and expanded from 300 to 4,500 people, in just four years.
But here’s what they don’t tell you about winning the lottery: the expectation to keep winning is oppressive. After two quarters of slower growth, 20% of our stock was shorted, rumours sank our profit, and investors who’d been desperate to get in suddenly pulled back.
The pressure was debilitating. I experienced severe stress symptoms. My decision-making capacity dropped to 10% of my normal ability. My personality changed. It began souring my relationships. I left, took a year off to recover, and realised something any novice statistics major could tell you about probability: that losing was the mathematical expectation of this system. Losing at some time period during the lifetime of a company is a given.
The funding ecosystem isn’t designed for founder success. It’s designed for investor returns – and investor returns in the timeframe investors need. Many traditional evaluation systems need one massive winner to offset nine failures, and they design their systems to go all-in on hypergrowth. The house is diversified and therefore “always” wins, and founders are forced to gamble with their companies, their health, their relationships.
Traditional evaluation methods make billion-dollar bets based on pitch decks, a small static slice of data, and gut feelings. The founder-investor relationship stays opaque, and increasingly outdated metrics are law.
At Gilion, we attribute our zero credit losses to date across 60+ investments and €100 million deployed to our decision to stop gambling. Technology now lets us see what old models ignore. We connect directly to companies’ systems – every transaction, every customer interaction, billions of data points analysed daily by AI. We see the actual anatomy of a business, not just the shiny surface.
Transparency is attractive for the first and second horses in the race, founders that want to keep a larger share of their company. This data-driven model favours the overlooked fourth, fifth, and sixth horses in the race. They’re growing 20-40% annually instead of 400%. They have 90%+ customer retention. Efficient unit economics. Clear paths to sustainable growth. They’re not lottery tickets – they’re logical bets, for companies that otherwise struggle to get funded. Banks want historical profits, VCs want 10x return potential. These solid, sustainable businesses, the ones that should be the safest bets, must roll the dice just like I did. The deck is stacked against anyone building for sustainability rather than moonshots.
For founders navigating this system today: it’s important to mix patient capital with aggressive growth funding before it’s needed. It’s also important to consider debt alongside equity – debt investors care about improving metrics, not scratch card odds. Debt investors don’t try to take advantage to push your valuation lower after a slow quarter. They simply have no incentive to do so since their main incentive is to get the loan repaid at the end of the term. As a result they are a great complement to VCs. And, it’s important to choose investors who understand that slower quarters are normal. When 20% of a company’s stock gets shorted because a business grew slower than expected, teams need partners who see past the panic.
Today, most founders still face the same impossible choice I did in that corner shop twenty years ago: gamble on a moonshot or risk not being interesting enough for equity investment.
However, the tides are beginning to turn. As AI deepens evaluation toolboxes, the infrastructure for better odds is finally being built. Europe alone faces a €375 billion funding gap for sustainable growth companies.
The technology now exists to fund companies based on real performance. To provide patient capital that lets founders build without breaking. To replace gambling with logic, hype with fundamentals, scratch cards with legitimate investment.
I lost that $5 lottery ticket. But, forced to gamble with my company’s future, I learned what no MBA could teach. When your only option is a game of chance, the system has already failed you. Twenty years later, from the investor’s side of the table, I’m building the alternative I desperately needed then. Because Europe’s innovators deserve patient capital that lets them build something real, not another casino that profits from their dreams.
This article originally appeared in the September/October 2025 issue of Startups Magazine. Click here to subscribe
