It’s the vision that’s tough. It’s hard to see all of the steps from beginning to end. You run into what some might call ‘project friction’ where, if only you knew all of the steps to get to your goal, you could get going and do something about it. Building a business, though, is a hard thing to explain on paper.

One of the best ways to see how it’s really done (as I mentioned in my SA to SV post) is to join a startup. That’s why I joined a startup, and it’s more important than any of the 9 reasons below. I wanted to see what motivated people to work for a dream and a prayer. I wanted to see how someone ran a company going through rapid change. I wanted to see what I’d do similarly and what I’d do different.

In Dave’s first post to Enter Venture, he really touched upon the inherent risk in every job. There is no such thing as a safe job (except for the few people in this country remaining in unions). Why not find the environment that suits you best? It may be a startup. It may not.

Personally, I think you’d be crazy not to even consider joining a startup. Here’s why I like my startup job so far:

1. Lack of structure – If there’s anything startups have, it’s potential. You can be anything and everything. You’re just going to have to figure out what that is, and as a startup employee, how to make it happen. No one’s going to tell you what to do.

2. Free food - Google’s cafeteria stories have created an industry standard among startups where you HAVE to offer free food. Hell, you’re probably not getting paid too much so the founders have to at least make sure you’re eating. (Full disclosure: I like free food — a lot).

3. Casual everything - I spent the previous year wearing a suit everyday. Now, I wear a t-shirt and jeans and play with the office dog in my spare time. ’nuff said.

4. Building something new – I’m going to defer to a comment I once heard from another Columbia alum. ‘There once was a guy named Goldman. There once was a guy named Sachs.’ You can build the next big thing a lot easier as long as you’re not working for the old, next big thing.

5. Like-minded, entrepreneurial people all around you - People in startups tend to come from all kinds of backgrounds, but they have one thing in common, they want what you want. If you’re like me, it’s the other 8 things in this list.

6. Define what you get paid… sorta – At a corporation, your pay represents your years experience, your peers, your role in the company, blah blah. At a startup, you can be a part of defining the success of the company and, therefore, the success of all those options you’re holding onto. You’ll still get paid more as an engineer over an office manager, but damnt, if the office manager figures out your business model, he’s going to do pretty well for himself too.

7. Work with people, not people playing the role of Manager/Executive/Director/[insert title of someone above you here] - The problem with highly structured organizations is that people are often put in roles where they actually believe in the titles they’re given. They feel like they have to live up to it and act the part. It’s hard to act superior in a startup, especially if you show up to work in your PJs.

8. Barely a meeting to be had – Every company has external meetings. The problem with internal meetings, though, is that they’re only useful for a few people. Everyone else uses them for doodling and quality ceiling-staring time. There are better things you can be doing for your startup than polishing your doodling skills.

9. Work on the most important stuff, all the time - There are always a million things to do. On any given day, you can only do those things that are the most important. Whoever liked doing the bullshit work, anyways?

In this post, I will try to cover some of the more straightforward options.

1. Self-funding: If you are employed, or have any sort of income, some of that can be used to fund your idea. Depending on your circumstance, this may mean dialing back some elements of the “lifestyle” or re-examining your income and expenses to see what you can really afford.

Pros: Ease
Cons: Often inadequate

2. Bootstrapping: This works best for short term, high pressure, low risk usage of funding. While risk in a young venture can be difficult to grasp, suffice it to say that massing credit card debt or high interest small business loans (angel funding) should be held until they are truly needed.

Pros: Quick, relative ease
Cons: High interest debt

3. Big Bank Small Business Loan: This could also be the use of home equity or similar low interest collateralized loan. Typically taken from a bank or large money lender at published rates. In my experience this is very difficult to get without at least one success story under your belt. Defaulting can cost you your house.

Pros: Large sums, Low interest
Cons: Collateralized debt, track record needed

4. Venture Capital: So many success stories involve venture funding that it is easy to think this is the only way business ideas get funded. This is a great option if you idea is in some facet revolutionary, or mildly innovative in a field of interest to the VC firm. VC firms typically take a controlling interest in the company in exchange for their capital, which can be frustrating for the passionate entrepreneur. However, VCs can often provide the monumental sums that cannot be raised any other way. Typically, you need to have a compelling and differentiating business plan, and the patience to be rejected over and over again.

Pros: Enormous sums, no repayment
Cons: Very difficult, and not suited to all plans. Loss of control, track record a plus.

5. The Rich Uncle: While not always an option, friends and family are more likely to trust and understand the passionate entrepreneur and will frequently provide better payment terms and interest than lending institutions. However, defaulting will make you feel guilty, and may make family life uncomfortable. That said, many successful businesses have gotten their start this way.

Pros: Ease, terms
Cons: Risking family money can be worse than risking your own.

6. Grants: A new option to me, and one I am still considering. There are many institutions, the US government included, that gives away money to people who are doing things of interest to them in some facet. If your idea is, or can be adapted to fit that definition, you may be eligible for grant funding. Several colleagues of mine have raised thousands of dollars this way.

Pros: No repayment
Cons: Difficult to research, difficult to win

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Given the options facing a starving entrepreneur, what is the optimal path to funding?

The path I am going to explore follows:

Start with my own income capital, and build success on a small scale before approaching grant organizations for funding. Show them favorable track record on a small scale, and a detailed plan on how their funding will be used. This is an option for me as I frequently build charitable contribution into my plans.

Using grant funding to drive growth and payroll expansion, I will scout for a low interest small business loan, and more rounds of grant funding. The loan capital will be used as much as possible on appreciating or stable assets or property that can be used to collateralize it. After staying in the black for several months or a year, I will begin approaching VCs with the aim of structuring a deal that will pay off the loans and limit the level of control they seek. Ideal would be to gain funding from two firms so that their interests can be faced against each other when applicable.

Thoughts welcome.

-Vik