Nowadays you start with $500K though, which puts you in a much better position when speaking with investors as your initial runway isn’t as close to nil.
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Yeah. It's better, though $500K is still low for a couple founders plus company expenses, given how much rents and cost of living has gone up in the past 6 years.
Especially if your startup isn't purely software, and involves some operational or hardware expenses, $500K is a no-go.
It's also the ballpark of what 2 technical founders could easily make by working for ~6 months in the bay area, and not have to give away any equity at all.
So if you're doing it for $500K, I'd say there are better ways to get $500K than giving up 7% of your company.
Now if YC handed out $2M and cut their batch size by a factor of 4 (being more selective in their applications), I think it'd be a really good play for them.
> It's also the ballpark of what 2 technical founders could easily make by working for ~6 months in the bay area
I think you're assuming the two founders don't need to pay rent or taxes.
Isn't running a business and especially a startup is supposed to be risky?
"We have an idea that's not materialized yet, give us money so we can live comfortably and reap all benefits it it works out and not lose anything if it doesn't." - sounds like a wishful thinking.
> Isn't running a business and especially a startup is supposed to be risky?
No, it is risky, and you want to actively eliminate as many of the risks as possible. Having a decent sized pile of cash is one way out of several of the risks. Supply chain shortages, founder medical expenses, mishaps and accidents, rising costs of living, personal emergencies happening to founders or employees requiring leave, there are a million things that will bite you if you don't have cash and runway.
"Supposed to be risky" isn't a good way to think about it, IMO. A lot of the time you'll hear people romanticize a couple of fresh graduates living on couches in a garage, living on ramen, and building a unicorn, but the reality is that most billion-dollar companies weren't actually built that way, and it isn't the best way to optimize your chances of success.
If something is risky, you should treat it as such. What I see people caught up in the startup/hustle/entrepreneur porn is the belief that they are different. No, statistics still show 95% of startups fail. You shouldn't be telling people to spend your youth on something that has 5% of less of success.
It depends a lot on personal circumstances, and this is what I wish was mentioned more.
For example, if you graduate with an engineering degree, can code, and don't have any grave medical conditions or loans to repay, I'd wholeheartedly encourage trying to start a company if you want to. It's risky in that the company would have a 95% chance of failing, but in that case you still learn a lot and it's fairly easy to land a job if you keep up your technical skills.
If you're stably married, your partner earns a high income in a stable job, and is supportive, that's another case where I'd say go for it, take the calculated risk.
In a lot of other cases, such as if you're knee deep in student debt, or (live in the US + have a medical condition + not a lot of savings), I'd advise building up a modest amount of savings first.
It really depends.