This paper explores the role of risk, diversification, and economic growth in early stages of development. The authors construct a model where indivisible projects limit the economy's ability to spread risk, leading to slow capital accumulation and high uncertainty. The typical development pattern involves a long period of "primitive accumulation" followed by take-off and financial deepening, culminating in steady industrial growth. Lucky countries with less risky investments may achieve faster growth, while risk-averse agents can trap economies in underdevelopment if they receive a series of unlucky draws. The model also identifies a source of inefficiency in decentralized equilibrium due to missing markets, which reduces the average speed of industrialization. The results are generalized to an open economy, where capital flows can increase or reduce the rate of industrialization, depending on the stage of development. The paper emphasizes the importance of luck and the role of diversification in economic growth, linking these factors to historical patterns of development.This paper explores the role of risk, diversification, and economic growth in early stages of development. The authors construct a model where indivisible projects limit the economy's ability to spread risk, leading to slow capital accumulation and high uncertainty. The typical development pattern involves a long period of "primitive accumulation" followed by take-off and financial deepening, culminating in steady industrial growth. Lucky countries with less risky investments may achieve faster growth, while risk-averse agents can trap economies in underdevelopment if they receive a series of unlucky draws. The model also identifies a source of inefficiency in decentralized equilibrium due to missing markets, which reduces the average speed of industrialization. The results are generalized to an open economy, where capital flows can increase or reduce the rate of industrialization, depending on the stage of development. The paper emphasizes the importance of luck and the role of diversification in economic growth, linking these factors to historical patterns of development.