I definitely know people who are doing this with dubious business plans. I think it's a fairly common exit from ibanking right now. I don't get the sense that it's easy to get financing in the millions, but there are enough angel investors out there that you can scare up 100-300k from wealthy doctors and lawyers who are just looking for "different" investments outside the market; I went to Wharton and we get angel investment emails ALL the time and I'm not even interested/involved in that world. So yeah -- a Chicago grad who is actively pursuing angel investments will find some. If you're single, 100-300k is enough to get by for a year or two even in Manhattan.

There are those who are committed to the businesses and working night and day to build them up to where they can get millions in financing, but for others, I think it is a "break" from work yet being to be somewhat professionally involved and call themselves a CEO is HUGE. The ones who don't come from money realize they will have to return to a job sometime, and they are more comfortable having ex-CEO of anything on their resume, than a 2 yr stretch of unemployment.

Plus I think everyone thinks they will be the next Facebook, LinkedIn etc.

Anonymous wrote:

Anonymous wrote:

Yes people, you are right. All people with money are stupid. And they just throw their money at other people. And they are broke right away. And no one works for their money. And they all have really easy jobs that a monkey could do. You happy now?

What a pitiful bunch.

My best friend is loaded (loaded) from a combination of inheritances and starting her own company (that a monkey and 99% of the population does not do - she's that smart, not just text book smart, but brilliant in other ways that make her successful).

If you ask her about her financials, she'll either laugh in your face, or tell you bad information you are sure to perpetuate to your suburban neighborhood pool cronies. And we'll have a good laugh, because she would never even tell me that kind of information with any kind of accuracy (understandably).

OP, worry about yourself a little more.

She was able to succeed b/c she was able to take risks that most people who must support themselves and have no safety net cannot. That's the secret sauce to start-up success; there are plenty of brillant people with good ideas but unable to take the flyer if it doesn't pan out b/c it would literally put them on the street.

"If you say so????""

Anonymous wrote:I've been in various startups for nearly 20 years now (ouch I feel old.. I did it straight out of college). Back then, startups weren't "cool" and there were no big cheerleading events for them and so on. Now there are plenty such events (just go to a DC Tech meetup), and jurisdictions fight to get startups to move there, and they even have a TV series about it (Silicon Valley, on HBO). In short, it's now cool to do startups so everyone wants to.

There's also a lot of money floating around. Your friend who was at GS and has an MBA from a top 10 school can easily raise some angel financing -- they likely have enough contacts. Also, angel investors aren't as sophisticated -- think a bunch of rich doctors or lawyers with some extra money to throw around (interesting trivia: next time you eat at Subway, read the wrapper carefully and you'll see "Copyright Doctor's Associates" on it... guess who started Subway?). They aren't going to really scrutinize financials, especially after they've handed over their $$, as they don't know what to look for anyway. Someone who was at GS can probably put together a really nice Powerpoint and really sell it to investors.

The problem is people like this often don't understand startup culture and what it really means. They come from corporate world, which involves expensive travel, expense accounts, etc. Meanwhile in the startup world, it's about saving as much money as possible. For some conferences, we'd all pile into someone's car and drive 8 hours to get there, since it saved a huge amount of money. We'd stay at budget motels and double-up in the rooms. That's the startup culture, because you're short on cash. It also meant working 6-7 days a week, 12/hour days, because it's the only way you're going to win.

People coming from a corporate background often don't understand this culture. They don't understand what it is to be "hungry" and cash-starved.

That said, I've seen a number of corporate types go into startups, usually at a later stage, and do really well. They bring some level of order to the chaos that is startup culture. That can be good when startups reach a certain point when it's no longer 10-15 people all working in the same room.

My current "startup" (now 10 years old) generates a very significant HHI and I only have to work 30 hours a week, but it was a long and difficult path to get the company to this stage. I started it entirely from my meager savings, and adjusted my lifestyle and company spending accordingly. I didn't eat ramen at every meal, but I did eat lots of eggs, rice, and cheap vegetables, that's for sure.

When you say hungry - it should *not* be in quotes. There are money trees, PP. Didn't you hear?

Anonymous wrote:

Anonymous wrote:

Yes people, you are right. All people with money are stupid. And they just throw their money at other people. And they are broke right away. And no one works for their money. And they all have really easy jobs that a monkey could do. You happy now?

What a pitiful bunch.

My best friend is loaded (loaded) from a combination of inheritances and starting her own company (that a monkey and 99% of the population does not do - she's that smart, not just text book smart, but brilliant in other ways that make her successful).

If you ask her about her financials, she'll either laugh in your face, or tell you bad information you are sure to perpetuate to your suburban neighborhood pool cronies. And we'll have a good laugh, because she would never even tell me that kind of information with any kind of accuracy (understandably).

OP, worry about yourself a little more.

She was able to succeed b/c she was able to take risks that most people who must support themselves and have no safety net cannot. That's the secret sauce to start-up success; there are plenty of brillant people with good ideas but unable to take the flyer if it doesn't pan out b/c it would literally put them on the street.

Seriously. It's like Trump claiming he hasn't had it easy bc his father ONLY gave him a small loan of $1 million. There are plenty of brilliant people out there with good ideas, yet they never end up being millionaires bc the downside risk of failure would be homelessness and food shelters. It's very easy to succeed (all other things like intelligence and education being equal) if you know your start-up could fail and while it would affect your net worth on paper, it wouldn't affect your daily life in any way.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Maybe I'm just not innovative enough, but I see this amongst my peers too and don't understand why anyone would do it? If I had enough investors that I could pay myself a salary, fine. But if I had to live off savings and credit cards, then I think a year of traveling to take a break who be much more rejuvenating than running one of these businesses. And I'm not someone who is against running my own business - buy a few properties and manage those or run a bricks and mortar shop - but these fancy businesses that supply nothing useful and depend on angel investors, go fund me campaigns, and family contributions just blow my mind.

Me too. 20 something w/ no responsibility -- give me a year in Europe, not a fake business.

yes, but when the money runs out he can claim 'ex-ceo' and leverage to another job; the whole mythos of creative destruction in places like silicon valley do not punish this type of risk-taking, blow someone else's money failure, they only punish risk-aversion (probably b/c VC keep coming back looking for the next Apple or Google... maybe Facebook too, but honestly it's P/E ratio is crazy high so its true valuation may be suspect).

There is a lot of cash out there, you can find funding for anything with the thinnest of business plans...

Where are you getting this bad information? You need to educate yourself through more than gossip.

I have college roommates in engineering in Silicon Valley, went to Ivy so lots of them in the VC space. There is plenty of capital out there, chasing all sorts of hare brained ideas (Yo!) or high risk ventures (weather satellites w/o any patended or proprietary tech, simply counting of first move advantage).

Honestly, NYC and DC barrier to entry for VC capital is much higher, and most of them are based on less ephemeral premises (at least artisnal bandaids are a physical item and have revenue early on).

That's peculiar. Most of my successful tech friends did not attend the top schools, for one. You are missing the point completely. You seem sorely misinformed. Let me know when you find those money trees, we will wait to hear.

I've been in various startups for nearly 20 years now (ouch I feel old.. I did it straight out of college). Back then, startups weren't "cool" and there were no big cheerleading events for them and so on. Now there are plenty such events (just go to a DC Tech meetup), and jurisdictions fight to get startups to move there, and they even have a TV series about it (Silicon Valley, on HBO). In short, it's now cool to do startups so everyone wants to.

There's also a lot of money floating around. Your friend who was at GS and has an MBA from a top 10 school can easily raise some angel financing -- they likely have enough contacts. Also, angel investors aren't as sophisticated -- think a bunch of rich doctors or lawyers with some extra money to throw around (interesting trivia: next time you eat at Subway, read the wrapper carefully and you'll see "Copyright Doctor's Associates" on it... guess who started Subway?). They aren't going to really scrutinize financials, especially after they've handed over their $$, as they don't know what to look for anyway. Someone who was at GS can probably put together a really nice Powerpoint and really sell it to investors.

The problem is people like this often don't understand startup culture and what it really means. They come from corporate world, which involves expensive travel, expense accounts, etc. Meanwhile in the startup world, it's about saving as much money as possible. For some conferences, we'd all pile into someone's car and drive 8 hours to get there, since it saved a huge amount of money. We'd stay at budget motels and double-up in the rooms. That's the startup culture, because you're short on cash. It also meant working 6-7 days a week, 12/hour days, because it's the only way you're going to win.

People coming from a corporate background often don't understand this culture. They don't understand what it is to be "hungry" and cash-starved.

That said, I've seen a number of corporate types go into startups, usually at a later stage, and do really well. They bring some level of order to the chaos that is startup culture. That can be good when startups reach a certain point when it's no longer 10-15 people all working in the same room.

My current "startup" (now 10 years old) generates a very significant HHI and I only have to work 30 hours a week, but it was a long and difficult path to get the company to this stage. I started it entirely from my meager savings, and adjusted my lifestyle and company spending accordingly. I didn't eat ramen at every meal, but I did eat lots of eggs, rice, and cheap vegetables, that's for sure.

Anonymous wrote:

Anonymous wrote:

Yes people, you are right. All people with money are stupid. And they just throw their money at other people. And they are broke right away. And no one works for their money. And they all have really easy jobs that a monkey could do. You happy now?

What a pitiful bunch.

My best friend is loaded (loaded) from a combination of inheritances and starting her own company (that a monkey and 99% of the population does not do - she's that smart, not just text book smart, but brilliant in other ways that make her successful).

If you ask her about her financials, she'll either laugh in your face, or tell you bad information you are sure to perpetuate to your suburban neighborhood pool cronies. And we'll have a good laugh, because she would never even tell me that kind of information with any kind of accuracy (understandably).

OP, worry about yourself a little more.

She was able to succeed b/c she was able to take risks that most people who must support themselves and have no safety net cannot. That's the secret sauce to start-up success; there are plenty of brillant people with good ideas but unable to take the flyer if it doesn't pan out b/c it would literally put them on the street.

Not necessarily. It is usually harder for rich people to succeed at something new, because they don't have to do well. They have, as you said, a "safety net". So kudos to the friend for doing well. It doesn't mean she used her own money (or any/anyone's money) for the start up, it just means she is good at what she does. A fact lost on most people here, sadly.

Hard work is taken as an aggression, and many people don't want to hear about it. (There is an entire thread on this recently). Most people here want to believe that everyone has some mysterious special break, or try to dismiss it as "family money". It's not so. Again, such a fact is lost on this audience. i thought people here were supposed to be smart? Wowza.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Maybe I'm just not innovative enough, but I see this amongst my peers too and don't understand why anyone would do it? If I had enough investors that I could pay myself a salary, fine. But if I had to live off savings and credit cards, then I think a year of traveling to take a break who be much more rejuvenating than running one of these businesses. And I'm not someone who is against running my own business - buy a few properties and manage those or run a bricks and mortar shop - but these fancy businesses that supply nothing useful and depend on angel investors, go fund me campaigns, and family contributions just blow my mind.

Me too. 20 something w/ no responsibility -- give me a year in Europe, not a fake business.

yes, but when the money runs out he can claim 'ex-ceo' and leverage to another job; the whole mythos of creative destruction in places like silicon valley do not punish this type of risk-taking, blow someone else's money failure, they only punish risk-aversion (probably b/c VC keep coming back looking for the next Apple or Google... maybe Facebook too, but honestly it's P/E ratio is crazy high so its true valuation may be suspect).

There is a lot of cash out there, you can find funding for anything with the thinnest of business plans...

Where are you getting this bad information? You need to educate yourself through more than gossip.

I have college roommates in engineering in Silicon Valley, went to Ivy so lots of them in the VC space. There is plenty of capital out there, chasing all sorts of hare brained ideas (Yo!) or high risk ventures (weather satellites w/o any patended or proprietary tech, simply counting of first move advantage).

Honestly, NYC and DC barrier to entry for VC capital is much higher, and most of them are based on less ephemeral premises (at least artisnal bandaids are a physical item and have revenue early on).

Anonymous wrote:

Yes people, you are right. All people with money are stupid. And they just throw their money at other people. And they are broke right away. And no one works for their money. And they all have really easy jobs that a monkey could do. You happy now?

What a pitiful bunch.

My best friend is loaded (loaded) from a combination of inheritances and starting her own company (that a monkey and 99% of the population does not do - she's that smart, not just text book smart, but brilliant in other ways that make her successful).

If you ask her about her financials, she'll either laugh in your face, or tell you bad information you are sure to perpetuate to your suburban neighborhood pool cronies. And we'll have a good laugh, because she would never even tell me that kind of information with any kind of accuracy (understandably).

OP, worry about yourself a little more.

She was able to succeed b/c she was able to take risks that most people who must support themselves and have no safety net cannot. That's the secret sauce to start-up success; there are plenty of brillant people with good ideas but unable to take the flyer if it doesn't pan out b/c it would literally put them on the street.

What many seem to be missing, is that angel investors are not schmucks. If they are investing, they believethere is a viable business.

Everyone I know who has started their own company has used only their own money, no matter how little. Who are these people giving money away? I would like to know.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Maybe I'm just not innovative enough, but I see this amongst my peers too and don't understand why anyone would do it? If I had enough investors that I could pay myself a salary, fine. But if I had to live off savings and credit cards, then I think a year of traveling to take a break who be much more rejuvenating than running one of these businesses. And I'm not someone who is against running my own business - buy a few properties and manage those or run a bricks and mortar shop - but these fancy businesses that supply nothing useful and depend on angel investors, go fund me campaigns, and family contributions just blow my mind.

Me too. 20 something w/ no responsibility -- give me a year in Europe, not a fake business.

yes, but when the money runs out he can claim 'ex-ceo' and leverage to another job; the whole mythos of creative destruction in places like silicon valley do not punish this type of risk-taking, blow someone else's money failure, they only punish risk-aversion (probably b/c VC keep coming back looking for the next Apple or Google... maybe Facebook too, but honestly it's P/E ratio is crazy high so its true valuation may be suspect).

There is a lot of cash out there, you can find funding for anything with the thinnest of business plans...

Where are you getting this bad information? You need to educate yourself through more than gossip.

Yes people, you are right. All people with money are stupid. And they just throw their money at other people. And they are broke right away. And no one works for their money. And they all have really easy jobs that a monkey could do. You happy now?

What a pitiful bunch.

My best friend is loaded (loaded) from a combination of inheritances and starting her own company (that a monkey and 99% of the population does not do - she's that smart, not just text book smart, but brilliant in other ways that make her successful).

If you ask her about her financials, she'll either laugh in your face, or tell you bad information you are sure to perpetuate to your suburban neighborhood pool cronies. And we'll have a good laugh, because she would never even tell me that kind of information with any kind of accuracy (understandably).

OP, worry about yourself a little more.

Anonymous wrote:

Anonymous wrote:Maybe I'm just not innovative enough, but I see this amongst my peers too and don't understand why anyone would do it? If I had enough investors that I could pay myself a salary, fine. But if I had to live off savings and credit cards, then I think a year of traveling to take a break who be much more rejuvenating than running one of these businesses. And I'm not someone who is against running my own business - buy a few properties and manage those or run a bricks and mortar shop - but these fancy businesses that supply nothing useful and depend on angel investors, go fund me campaigns, and family contributions just blow my mind.

Me too. 20 something w/ no responsibility -- give me a year in Europe, not a fake business.

yes, but when the money runs out he can claim 'ex-ceo' and leverage to another job; the whole mythos of creative destruction in places like silicon valley do not punish this type of risk-taking, blow someone else's money failure, they only punish risk-aversion (probably b/c VC keep coming back looking for the next Apple or Google... maybe Facebook too, but honestly it's P/E ratio is crazy high so its true valuation may be suspect).

There is a lot of cash out there, you can find funding for anything with the thinnest of business plans...

Anonymous wrote:

Anonymous wrote:Wouldn't you have to pay back your investors? So, that's like using cc's, right?

I thought angel investing was equity not debt; like stock - if your business is successful, the investor gets a return but if not, he doesn't have a claim against you.

Angel investors usually take equity, but later stage can have 2x or 3x redemption clauses, which can act like debt against the company's assets..

http://www.businessinsider.com/heres-the-dirty-secret-thats-inflating-the-tech-bubble-2015-11