Even a few months savings really isn’t enough. I also have a family and a home, so this was a big decision for me as I left a good, stable job to start TempMine / enter TechStars. You can’t count on funding being there the second the summer ends, or in Boston’s case next year, the second the Spring ends. It takes most teams time, often six months or more, to raise their rounds, if they’re successful at all. Couple this with the fact that Boston is just plain expensive, and yes, the $6k per founder isn’t much. I think it’s doable for a single founder (as in not married, not a solo founder), but without pretty substantial savings and life changes (ie: be cheaper then you ever thought possible), it’s really not doable for someone with a family, mortgage, etc.

So maybe this isn’t the right thing for you. Maybe a more traditional route of maintaining a full time job while trying to get your prototype / MVP built would be a smarter move. Of course, there’s nothing stopping you from going that route, and then applying next year after you’ve had more time to save. A few of the teams this year were pretty far along (ie: production code with products released) , so no one will fault you for building something before applying. I can’t speak for David aor Shawn, but it might even help your chances.

Feel free to ping me with any specific questions.

-Tom

A lot save up to do this, a few raise a early friends and family round to do so. It is a tough situation, but one that can be planned for and is achievable.

This is a post by a past founder, which I find fitting: http://georgeaspland.blogspot.com/2009/08/techstars-changes-everything.html

I think I focused a bit more on the 6% than I intended to. While it’s an area of concern for me, it’s not my primary one. My though it more that it seems more unexpected.

In the end, this post is less about the 6% and more about the $6k. I’m currently in a position where I’m starting a company with 2 other people. For all three of us, $6k over 3 months isn’t enough for us to be able to devote our full time to a company.

It would leave all 3 of us with 2 options.

1) Working full-time, for 3 months would complete exhaust our finances. With the current job situation, that means we would likely be financially ruined if we were in the 30% that didn’t get funded.

2) We would have to maintain side work to pay the bills, which would reduce the chances of the company succeeding.

I would be very interested to hear how other companies make this work. Is it all personal savings? Other funding? Loans?

In all honesty, if I had enough savings to last me for a few months, I would be all over this. However, I can’t afford to risk my family’s home for it.

So yeah, is 6% a lot of your company, sure. It’s a HUGE amount. It’s more than your first employee will likely get, then most individual angels might buy, it’s more than a founder might have earned after a whole year of work. It’s a lot. But when I look back at what we received in exchange for our 6%, this TechStars alum knows without a doubt, that we got the deal of the century.