In my opinion, if you aren't ready to balance school/work and your startup until your startup is self-sufficient, you aren't serious enough about your startup.
Looking back, I'd have needed something north of $200K to get where I am now, to learn what I learned. Hardware mistakes get expensive fast, and I was at this for 3 years before it took off.
Who is going to keep feeding me cash after my second failure? my third? Me, that's who. Who is going to support two people to write a book that is likely never going to repay the expense of keeping us alive for the period of time it took to write it, much less to cover the opportunity costs? I did.
The thing is, if I went with investors, I would have needed to take the 'pretend you are doing something new' path, and to charge what look to me like ridiculous prices. Now, maybe they'd also bring on marketing people that would make those ridiculous prices tenable, but going with investors, I'd have probably been either dead or bought out by now.
Also the startup is much more interesting. School is just an unnecessary impedance to the startup and if I am serious about it I wouldn't even care about school (which I don't). The problem is my parent's aren't going to pay for me to relocate to silicon valley or fund a risky project. They'd rather fund college.
So my options are to find a way to fund myself so I have a legitimate reason to focus full time on the startup, or balance school and startup. The problem is I have a hard time enforcing a balance and the startup gets more of the attention.
So ideally I want to be in a position where I need no balance and focus solely on the startup.
I agree that when you balance your startup and your work/school, one or the other will suffer. I know I have not given my heart to any of the contracting projects I was working on. I mean, I worked on what I was paid to work on when I was getting paid to work on it, but they just weren't getting the same value they would have if I was thinking about their problems in the shower instead of mine, you know? I didn't feel good about that.
So yeah, I feel a lot better about myself now that I'm full-time on my company. But even then, you have sloppy compromises. I don't have investors, so I always have the option of the 'honorable death' rather than doing something slimy, but the market forces you to make sloppy compromises.
Me, I have always had a deep hatred of marketing in nearly all its forms. And guess what, now I'm the marketing guy. Granted, I am a fairly truthful and transparent marketing guy; I generally try to avoid (or at least tell you ahead of time) if I have any 'perverse incentives.' but still, I now spend probably 20% of my time bragging about myself, an activity I maybe enjoy, but certainly don't admire. I mean, really, my biggest flaw is my massive ego. In my heart of hearts, I believe I can do anything. You have to carefully control that sort of thing.
edit: removed baseless speculation about running a company with investors.