As an employer, I hate what I’m about to tell you.
The best way to fund your startup company is to stay at your current job.
I’m not suggesting you stay employed so you can steal office supplies and clients. What I’m telling you is that you can make starting a business significantly less burdensome if you’re still pulling In a regular paycheck.
As long as you’re willing to invest your moonlight hours to develop your business, continuing to take a salary while launching your startup company is basically like asking your current employer to fund your new startup – without actually asking them.
There’s a way to have your cake and eat it too. It has less to do with deception and trickery, relying instead upon commitment and focus. The goal is to get your new startup off the ground quickly and with less capital without sinking your current employer in the process.
Don’t quit your day job
People often think starting a company begins with a resignation. Starting a company does require that you resign yourself to dedicating your time and energy, but it doesn’t require that you give your boss the “final notice.”
Many entrepreneurs go years before cutting their ties to their day jobs. When I was starting my first company, Blue Diesel, I was a receptionist at the law firm of Jones, Day, Reavis & Pogue. In between phone calls I would develop websites for our first clients on my laptop. I literally couldn’t afford to quit my day job, even at 19 years old.
You should think about staying with your current company as long as it’s feasible. A steady stream of income means you can devote more cash to the business, which may need every penny. It also means that you can spend more time lying awake thinking about how to grow your company and less time lying awake thinking about how you’re going to pay your mortgage.
Get used to working around the clock
If you think you can moonlight and still only work 37.5 hours per week you’re out of your mind. Moonlighting means wagering sleepless nights and strained personal relationships for a potential payoff in opportunity. You need to adopt an 80-hour work week. It’s not fun and it’s not easy, but it’s the sacrifice you must make to keep your regular income.
You also need to think differently about how you work. Up until now you’ve only had one job. What I’m suggesting will require you to master switching gears easily and maintaining laser focus on the task at hand.
What I’ve found is that you can’t easily do two jobs simultaneously. You need to “punch in” at a certain time and stay focused on one job. It sometimes helps to maintain a separate physical location, like a home office, specifically for your new venture.
Don’t Screw your Employer Over
Moonlighting isn’t an excuse to shortchange managers at your day job. The worst thing you can possibly do is stick it to the person that signs your paychecks. The best thing you can do is leave the company working better and more profitably than you found it. This isn’t just covering your butt from getting fired early, it’s good karma. And you’ll need all the good karma you can get when you launch your new startup!
By contrast, some people may consider mentally checking out of their current job because they are completely wrapped up in their new idea. That’s absolutely normal, yet it’s absolutely irresponsible. You owe your attention to anyone that’s paying your salary.
Should your new venture turn out to be a dud, you don’t want to have killed your existing career by falling down on the job. Even great ideas turn into crappy companies, so don’t bet the farm just yet.
When the time does come to cut ties with your current employer, the only way to leave is on a positive note. I have never met anyone that said “I’m so glad I pissed off everyone at my old job. It’s helped my career tremendously!”
Your exit from the company is your legacy, so be considerate in how you close one opportunity to pursue another. Former companies have a way of becoming valuable allies and, sometimes, even clients. You may never need to go work at that company ever again, but that doesn’t mean you will never have to deal with the bad blood that gets circulated from a rough departure.
It’s All About Getting Paid
The only way to see that everyone wins in a moonlighting situation is to make sure everyone is paid fairly. Your employer is paid by having someone that is committed to doing their job. Your new startup is funded by not having to carry your name on the payroll. And of course you’re paid all along the way.
Now all you need to do is find a way to fit in the other 40+ hours of additional work every week! I never said it was going to be easy.
Wil Schroter is the Founder + CEO @ Startups.com, a startup platform that includes Bizplan, Clarity, Fundable, Launchrock, and Zirtual. He started his first company at age 19 which grew to over $700 million in billings within 5 years (despite his involvement). After that he launched 8 more companies, the last 3 venture backed, to refine his learning of what not to do. He's a seasoned expert at starting companies and a total amateur at everything else.