In fact, I have a proposed panel in to SXSW on this very topic — your startup and your family would each happily take up your entire life ... so how do you balance the two of them and not fail at both? Once the panel picker opens up for voting (August 9th), I'd love it if you could vote it up.
Anyway, there are a bunch of different ways your startup can go, and a bunch of different ways your family can go.
On the family side, are there any grandparents nearby? Is your wife supportive of what you're trying to do? Is she income-earning? Are the kids super-needy, or are they older, more capable, and more self-contained? Do you have resources in the community that you can rely on (church members, neighbors willing to babysit for free (or trade babysitting time), etc.)? All of those will help.
On the business side, how young is the startup? Are you bootstrapping, or are you looking for investment? If you're going the financed route, have you taken any rounds yet? Are you the only founder, or do you have co-founders? Do they have families? Or are they all single? Those all have a bearing on how things will go.
My super-quick story: I mentioned my wife and three kids. I also have a mortgage. And it's all paid for with our bootstrapped small web-business. Most here would call it a "lifestyle business", as we've neither taken funding nor are looking for funding for it. I also have a second subscription-based web app (http://monotask.com) that's just about to launch, that I've worked on with a cofounder who also has a wife and three kids.
Summarizing my advice (recognizing it might be wildly inappropriate for your goals, as I can't give advice on financed startups), I'd say: * build something small that meets a need you either have or see as obvious * launch it as soon as you can, and start getting feedback on it * don't quit your day job until the side project has proven itself * if it doesn't seem like it's going to prove itself, pivot * start to hoard your cash now; don't spend any money you don't absolutely need to; this is your runway * don't wait to get moving on it: as someone said once, almost every person you'll talk to who's started his own business — whether it succeeds or fails — will say "I only wish I'd done this earlier."