Just as there are Journals of Negative results [1][2] so too should there be a journal of failed startups. Your detailing of what caused the failures could save thousands of man hours and potentially someone falling into the same traps.
Goal #1 for you right now is to get your family in order and steel the troops for tough times ahead as you get back on your feet.
In short order though you should start simply documenting the process that led to your company failing. Not only will you learn from it but it will help others.
If you are in the DC area don't hesitate to reach out to myself and my family. We have kiddos the same ages as yours so they would have a ball.
[1] http://www.jnrbm.com/ [2] http://www.jnr-eeb.org/index.php/jnr
I'm sure there's plenty of lessons to be learned from failed startups, but even 5 years after my first failed startup, I still don't like thinking about it, least of all documenting what went wrong.
Now, fortunately I do have a venture that's been somewhat of a runaway success, in spite of me. The only truth I can relate do what you must and then get lucky. There isn't some secret method to success(despite what your methodical brain tells you).
It may be survivor bias or whatever, but I still don't like harping on my failures. I know the severe guilty feeling that I get knowing that I not only risked my own but my family's well being possibly, but then again, at least I tried. Life's tough, live to fight another day & survive long enough till you get lucky. I for one am not looking to revisit my failure any more than I already do, it's too traumatic to relive.
I know that feeling. I have failed before and hard. I did however resolve to ensure that it wasn't for nothing by, as your co-founder suggested, dissecting it. What I found was that instead of it just being a downer, I realized how many good things were done and how many exciting developments, both personally and professionally came out of what was at the end of the day a failure.
In the end the margin of failure can be tiny - but I would guarantee that you will also be able to find some massive successes in there as well. Adding to that the benefit that others would take away and I think it would be of great benefit.
We used to have something like that.
(My solution was to relocate countries, from Victoria, Canada to Silicon Valley. We did this in 2 weeks. Now, ironically, I'm doing a startup, but living back in Victoria.)
If you're a programmer and a US citizen, you have won the talent + nationality lottery. (I'm the former, but not the latter.) If you're both, realize how fortunate you truly are.
One course of action is to...
1. Move to Silicon Valley if you're not there right now. It's a boom, and it sounds like you don't have much to lose at the moment.
2. Go be an early employee at some startup that is funded. Maybe you'll get lucky and it's the next Dropbox or Snapchat. Or maybe you'll just earn good money in a great climate.
3. Consider doing another startup once you have savings or can bootstrap doing consulting. However, bootstrapping takes a LONG time and requires serious commitment.
Good luck! Peter
I'd wish you good luck, but you don't need it. It sounds like you've already got a wonderful family. That makes you a pretty lucky guy when you think about it.
Just keep your head up, and know that you've got a lot of people rooting for you.
Perhaps some of us might help :)