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Comment by mlLK | Hacker News Reader

I'm curious as to how those individuals working on a startup full-time are able to support themselves without receiving any compensation. Are you simply a student going to school and this is a non-issue? Or are you working form some sort of financial cushion you saved up from your previous job?

More bluntly, how do you pay for rent and food?

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I moved from Los Angeles to Kuala Lumpur and I can attest that it's quite an enormous saving on rent and food. I must preemptively qualify Malaysia as a fabulous location for a web start-up as it scores extremely well on my PEST analysis and other essential factors. Also being physically away from my "rock and roll all night and party everyday" friends indeed dramatically cut down on my socializing budget. It all rosy here, up until now that is.

1. Get high paying contract work.

2. Live as cheap as possible, live with relatives, clients, whatever cheap thing you can find.

3. To keep you working hard, hire some part time help in areas you suck at. For me this is design.

4. Bum food, complain about lack of money. You'll get more pity and help these days.

5. Spend money wisely, don't get services that don't give back at least as much value as they cost.

Free rent (thanks sis!) and a small savings since I was laid off. I keep a vestigial social life and cook at home. This has been since January.

"Free rent (thanks sis!) and a small savings since I was laid off. I keep a vestigial social life and cook at home. This has been since January."

Thats plain crazy, wont believe if i tell you that , i have a sis, and have got small savings, was laid off sometime back, and i keep a vestigial social life..

but im hating this

im *not hating this...was a mistake

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I was able to sign up my existing contracting clients to my new product in a sort of paid private beta. That covers the business expenses 4-5 times over while I finish the product and can really push with sales, and other than that I live at home with the parents - gives me a nice runway, and I'll probably give my parents some profit share / equity for their support :)

>More bluntly, how do you pay for rent and food?

I am working on a startup part time while a (grad) student, and I pay the bills by being a TA (which refunds tuition and gives me just a little more than I need for living expenses). Keeps me pretty busy. :) Don't think I could do it full time (i.e. drop the TA job) though.

I don't think it's accurate to assume that all start ups have absolutely no money--my fulltime job came about due to part time work with friends after hours--when they raised just enough cash to pay salaries I came aboard. I'd still consider it a start up.

I saved money while working at my last job.

But I'd point out that working on a startup full-time does not preclude receiving cash compensation. Aside from the founders, the current employees of my start-up are earning competitive cash compensation.

Venture capital. I know it's not as hip as ramen but it sure pays the bills.

There seem to be 4 routes:

1 have rich parents (not kidding)

2 work part time until you can get angel investment

3 a pre-angel incubator ala YC

4 live somewhere really cheap and use savings

In the two startups I've worked for, I personally saw routes 1 and 3.

1 have rich parents (not kidding)

I'd broaden that category to "have tolerant parents". My parents aren't rich, but they have a basement which would be empty if I wasn't living here.

All 4 could be broadened:

1 have rich parents (not kidding) >> Parents

2 work part time until you can get angel investment >> Another income

3 a pre-angel incubator ala YC >> Small investment/tor

4 live somewhere really cheap and use savings >> Savings

I think all 4 imply also living cheap

Yes, but it's not just living expenses -- I was thinking along the lines of can your parents float you $25K for startup costs such as equipment and working capital? How about $100K? Is it a big deal if they don't get it back, ie is this their retirement, or is just kind of a bummer? And so forth...

The startup I was thinking of needed the money in order to establish business relationships -- the business they are in requires quite a bit of working capital. The founder's parents basically gave him $150K and they aren't so rich that they wouldn't notice, but if he had lost the money, it wouldn't have been a particularly big deal. (Sorry, I'm not trying to play coy, so if anybody is interested, email me and I'm happy to give names, but I just don't want this account to be googleable.)

Edit since I can't reply and want to go to sleep -- yes, this makes your parents angels, but getting angel investment suffers from who you know -- how many people grow up knowing angels? So your parents offer three major advantages:

1 - you know them already

2 - you know them already

3 - they are probably more willing to take a chance on you... and you know them already

I think when you get into the "parents give you $150k" range, the parents in question fall more into the category of angel investors than anything else.

Can I add another route? 5 Using an existing profitable business to incubate a startup within.

The consulting business I run funds the development of a number of skunkworks projects, and it looks like two of them will see light in their own right.

yup. we're incubating 2-3 projects this way right now :)

1b could be 'have a decently paid wife/husband/partner' - that approach is working for me, so far, tho I am still doing some freelance dev to keep things relativley fair

This works for me - barely. While the finances are fine, the stress level at home can get out of hand. Having a well-paid spouse who is willing to accept the uncertainty inherent in early-stage, pre-funding startups is MUCH more difficult to arrange than just the well-paid part.

"1 have rich parents"

They don't need to be soooo rich (you don't need millions to start), if they understand what you do, they'll support you. Also living within your family will reduce costs: rent + fooding + other things.

I'm doing it from home and starting slowly but surely

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