How do serial entrepreneurs such as Kevin Systrom and Jack Dorsey sustain themselves while working on a project that doesn’t yet generate cash-flow?
Unfortunately there is no magic involved here. In the two specific cases you mentioned, one had made money from his previous startups, and the other had paying jobs at Google and Nextstop.
Typically serial entrepreneurs are serial because they have successfully exited from Startup One before beginning Startup Two, and they use the first one to fund the second. If not, and they have neither savings nor parents to help them out, they need to find a paying gig (either a traditional job, or a revenue-generating lean startup such as Travis Corrigan describes) to fund their living expenses while they get the next startup off the ground working nights and weekends.
Once the startup has some traction, if both the idea and the entrepreneur are really good there is the possibility of raising seed capital from friends, family, fools or angels, in order to fund the company until it either gets to break-even (Square has $100m in revenue!), or (like Instagram or Twitter) explosive customer growth that can eventually be monetized.
*original post can be found on Quora @ : http://www.quora.com/David-S-Rose/answers *
Written by David S. Rose
You might also be interested in
Co-founder Equity Split: A New Framework to Objectively Divide Startup Ownership and Get Back to Building a Business
We’ve just released our free Co-founder Equity Split tool. It’ll give you a fair and objective recommendation about how to divide your startup’s ownership, so you and your co-founders will have a sensible, real starting point for this notoriously hard, crucially important conversation.
Many startup founders find themselves lacking clarity and direction when it comes time to divide their
With startup growth up 61% since 2014 and more investment programs emerging, it can be overwhelming for founders to know just where to jump in. As the most startup-friendly accelerator on the planet, MassChallenge has helped 835 startup companies around the world, who have raised over $1.1 billion in funding and created over 6,500 jobs. We have seen startups at
Update 2017: To help you understand how your startup will look to investors according to this methodology, we’ve created a fundraising feedback tool that will give you investor-level insight into your startup’s performance. In just about 15 minutes, it will tell you how much money your startup is likely to raise, where you can find that capital, and what to
After less than a year, Glassbreakers is now a team of 10, we have thousands of active users on our free product, we’ve expanded into enterprises with paying customers and raised over a million in seed funding. After a few of my Glassbreaker matches inquired, I started to reflect on what it’s like to build a startup
The median investor looking at your proposal is in her 40s. Her eyes are going, not to mention her brain. I look at a lot of spreadsheets and analytic reports, and way too many are difficult to read and therefore hard to understand.
In an effort to make my life easier, I’ve summarized here the steps that will