I've started about a half dozen companies over the decades, half of which were successful, profitable enterprises.

For all of them, I started with no safety net at all. Sometimes I had a side job (if you're starting a business, your business must be your main job and anything else is your side gig), sometimes I had an investor, and sometimes I white-knuckled it. There are obvious advantages and disadvantages to each approach.

Except for when I had an investor or side gig, I arranged my business so that it would generate some income from day one (that income being from efforts that were not what the business was attempting to do, but could leverage the same assets -- this was usually contract work. This is part of a business rule I believe very strongly in: anything you do should pay you in more than one way.)

That said, I'm currently preparing to start a new venture, and this time I'm building up a bankroll first, as I'm of the age where my risk tolerance is lower than it was when I was younger. My target bankroll is $100,000. That is money I can burn, and doesn't count retirement, personal savings, etc. $100,000 would let me work on the business without any additional income for two years.

Intresting, do you mind me asking what age you are at that made you feel like you need that large of a bank roll first?

I'm in my late 50s.

I'm choosing to have a largish bankroll this time because, quite frankly, I don't want to have to make the sacrifices that are otherwise likely when you don't have an ongoing income -- and during the initial stages of a business, you won't have a meaningful income personally, it will be going into the business.

I could get by without the bankroll, as I've done before, but this time I want a little bit more comfort.

I should add that this is because of how I prefer to do business -- I am unwilling to take debt, large investments or VC money. Not that there's anything wrong with doing those things -- they just don't mesh well with my personality.

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)

Yeah, I was just talking to someone who had approx $250K in savings, and another $250K in seed capital. Additionally, they would easily qualify for another $250K in credit financing if desired.

The upshot is: they will probably take a bigger risk. Targeting enterprise grade hardware, rather than consumer internet. But in no way would I construe that as translating into a higher TAM, or probability of success, or ability to execute.

I feel incredibly blessed by my own position. Being able to bootstrap on little more than allotted cloud credits.

And to be honest you can start with less. There are people sourcing orders without a product first via pre-sales commitments. You can even get by without a landing page if there is already inherent market demand. An email address, a phone number, a side deck on google docs. Very little is required to begin testing your ideas immediately.

Best of Luck ;)

I had less savings than you did before starting our company 10 years ago. I was 30 and living in Canada also. But our path was not "quit paying job > make a product > hope it breaks even!" We started by taking development consulting gigs and bootstrapping until we made our product. For product, it took years before it broke even, and consulting gigs/revenue kept us alive and profitable; and it wasn't the first product we made - which was a failure. We're now ~40'ish people.

My advice if you are going to start a company and bootstrap it: cashflow is king. Ensure that you always have cashflow. Funded startup is an entirely different beast where the company itself is the product - so you can burn like crazy because you're (supposed to be) creating value in the business/IP itself.

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 completely down.

If I was living in Canada, I'd keep an at least $200K safety net.

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.

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

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

I have a different take on this. Yes, you need to have some minimum savings/emergency fund. However, I would say that you should focus more on your "employability" factor. If you are really good at your job and can always find a job, then don't worry about failing in a startup. You can always go back to a gig.

I would say don't just calculate safety net based on savings but also on your employability. Good luck.

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?).

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.

Negative 1000 USD plus a 5000 USD retainer. 2008/2009 were fun times.