How do people pay the bills when they start a company? I'd go start a company right now if I could figure out how to pay my car payment while doing it.
- Have a family that can back / help you out financially.
- Have a working spouse that can float you.
- Have funding secured BEFORE launching your startup.
- Have a solid network of friends, acquaintances, co-workers, business partners, etc. that have enough money to support you.
And so on.
Not really the best kept secret, but a LOT of startup founders come from social classes where money isn't that difficult to get. And others work in lucrative industries before launching their entrepreneurial careers.
For ages there's been this debate on being able to afford (taking) risks, which tends to be strongly correlated with your socioeconomic background.
Taking out credit-card loans, mortgaging your house, etc. def isn't the norm.
> Not really the best kept secret, but a LOT of startup founders come from social classes where money isn't that difficult to get.
While maybe not a secret it is striking how many startups had initial "friends and family" pre-seed/seed.
I think it's very important to call-out for those like OP where having ready access to five-six figures is one of the main reasons why a lot of founders can "take the leap" while it seems nearly impossible/terrifying for those who don't.
Needless to say if things don't work out those same friends and family can help the failed founder "get back on their feet", repeat for the next one, or keep dumping in cash for runway.
Having ready access to such funds and the safety net these same networks often provide makes a world of difference.
Maintain low expenses, be OK with going down in life quality, be willing to burn through your life savings and be OK if you lose it all.
I did it once, now doing it for the second time. I think most people will not bear it, but for me it feels like the only natural thing to do.
I can never imagine enjoying either running a hyper-growth VC funded company or being an employee, and I realize most people are not like that.
So on that end, maybe ask yourself if you were OK with cutting costs like losing the car, moving to a smaller apartment (even back with your parents) etc.
and be happy about it even if your company flops.
Don't have car payments? Just buy a cheap or used car for cash instead of a fancy car that you can't afford.
Live below your means, so you're not stuck in working longer and longer hours just to pay for your lifestyle.
Accept help from family. If your parents have a big house, move back in with them. If your wife has a good job, ask her if she's okay with being the primary breadwinner for some time.
Build a small fraction of your company on the side, while still working as an employee.
Maybe even find some contract work to do part time.
Or find an investor who pays you a salary to work on your startup :)
It may take a few of months ( <6 ) to cover your cost of living, but if you can sell, it’s readily achievable. The trick is pricing high enough to actually achieve this on 2-4 customers.
In my experience, almost all new businesses price far too low in the early days.
1) Have jobs that pay well, and do a pretty good job of saving for years and years. There are several reasons that, despite the prominence of young founders in pop culture, successful founders in fact tend to be quite a bit older—that's one of them.
2) Family money. Either have access to it directly, or be personally "poor" but with an excellent safety net in the form of rich (-enough) relatives who won't let you really suffer if things go poorly (and may help fund your business, even). Doesn't need to be, like, Rockefeller money, either—parents who can guarantee you a place to live, comfortably cover your living expenses for a while, give you the occasional four or five figure interest-free loan without putting their financial security at risk, that kind of thing, can be enough to eliminate most of the personal risk of trying to start a business.
I spent the first 15 years of my career grinding and saving cash + equity as a SWE. It turns out that some of that "worthless" startup equity eventually CAN turn in to Real Money and now I'm using it to pay my bills while I build my own thing.
- Have a working spouse that can float you.
- Have funding secured BEFORE launching your startup.
- Have a solid network of friends, acquaintances, co-workers, business partners, etc. that have enough money to support you.
And so on.
Not really the best kept secret, but a LOT of startup founders come from social classes where money isn't that difficult to get. And others work in lucrative industries before launching their entrepreneurial careers.
For ages there's been this debate on being able to afford (taking) risks, which tends to be strongly correlated with your socioeconomic background.
Taking out credit-card loans, mortgaging your house, etc. def isn't the norm.