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Ask HN: How much savings did you have before starting your startup?

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Re: Ask HN: How much savings did you have before starting your startup?

#11

Post by makeee »

I had about 30k. Jumped into startup full-time, spent it all, racked up 10k in CC debt, spent a few months doing contract work on the side to keep the lights on, now about a year later ramen profitable and working down the debt quickly.

I think it depends a bit on the product you're building, how long you think it would take to validate, and your safety net (can you get some quick contract work if needed?).

Re: Ask HN: How much savings did you have before starting your startup?

#12

Post by q-base »

I blew through 20-30k over 3-4 years of working on my own startup. It did not make any money so I had to start freelancing.

Since I have started another company but this time I won't quit until it has proper traction.

You do not want personal finance problems on top of startup problems. They are hard enough by themselves.

Re: Ask HN: How much savings did you have before starting your startup?

#13

Post by Kareem71 »

p1esk wrote: post #9
photawe wrote: post #2

My advice would be to actually keep your job and work on your startup at the same time. Clearly, this is not for everyone - it can put a lot of pressure, but I do think it's sustainable 1-2 years. Now, 60K in savings, in my mind is zero. I mean, you do need to live, and also working in your startup - very likely you'll need to spend at least 2-3K/month. You'll end up with no money in 6 months, and with your morals co…

If you spend $2k/mo $60k should last 30 months, no?

My thoughts also, I assumed I might have closer to that amount of time before hitting rock bottom

Re: Ask HN: How much savings did you have before starting your startup?

#14

Post by richardknop »

p1esk wrote: post #9
photawe wrote: post #2

My advice would be to actually keep your job and work on your startup at the same time. Clearly, this is not for everyone - it can put a lot of pressure, but I do think it's sustainable 1-2 years. Now, 60K in savings, in my mind is zero. I mean, you do need to live, and also working in your startup - very likely you'll need to spend at least 2-3K/month. You'll end up with no money in 6 months, and with your morals co…

If you spend $2k/mo $60k should last 30 months, no?

You would need to start looking for a job before you hit 0 though as it might take few months to find a job and have income again.

So 60k I would say can stretch to 2 years if you can keep your budget of spending just 2k per month. Once you only have 10k in your bank account and your business is not profitable yet you need a job.

Re: Ask HN: How much savings did you have before starting your startup?

#15

Post by photawe »

p1esk wrote: post #9
photawe wrote: post #2

My advice would be to actually keep your job and work on your startup at the same time. Clearly, this is not for everyone - it can put a lot of pressure, but I do think it's sustainable 1-2 years. Now, 60K in savings, in my mind is zero. I mean, you do need to live, and also working in your startup - very likely you'll need to spend at least 2-3K/month. You'll end up with no money in 6 months, and with your morals co…

If you spend $2k/mo $60k should last 30 months, no?

I meant $2k just for the business side, in addition to your monthly expenses.

Re: Ask HN: How much savings did you have before starting your startup?

#17

Post by kugelblitz »

I didn't have savings, I worked nights and weekends until it was making a little money. I then moved on to freelance contract work, where every 3-4 months (new project) I can adjust the workload. So the more money the startup made, the less freelance I would do. Now my first project is mostly automated and it can replace about 2 days/week of freelancing, and I think I hit a revenue ceiling in the niche, but that's fine, I've since reduced my workload in the project, making it a (small) cash cow.

I still freelance 4 days, 1 day/week I'm building up a second venture, hoping it can replace another 2-3 days of freelance per week :-).

My personal burn rate is negative, so I have an infinite runway. Good thing, too, because sometimes it just takes a while for clients to build up trust. I've seen competitors come and go, they lasted 1 or 2 years. Others had to take investment money and have less control of the company now.

A couple of times I've invested full time in the projects for 2-3 months, hoping it would give enough of a boost to let me work on it full time, but the boost was minimal, and I burnt through a big chunk of the savings. It took a year to financially recover.

"Good things, sometimes, take time." - Lou Mannheim in Wall Street (1987)

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