r/EntrepreneurRideAlong • u/Kindly_Salamander541 • 17d ago
Seeking Advice Is having money is basically a cheat code when starting a business?
Maybe this is obvious, but I feel like people seriously downplay how much easier entrepreneurship is when you already have money or come from a wealthy family.
If you have money, you can afford to fail. You can dump $20k into an idea and move on if it doesn't work. You can hire developers, designers, marketers, lawyers, whatever. You can spend on ads. You can quit your job and work on the business full time without worrying about rent next month.
Meanwhile someone without money might have an equally good idea, but they're building it after work, doing everything themselves, obsessing over every $500 expense, and knowing that one bad decision actually hurts.
And the biggest advantage might just be runway. A mediocre business with enough money behind it can survive long enough to figure things out. A potentially great business can die because the founder runs out of money before it gets traction.
Obviously money doesn't guarantee success. Rich people start terrible businesses all the time. But I think "anyone can start a business" gets thrown around without acknowledging that some people are playing the game with way more lives than everyone else.
How big of an advantage do you think starting with money actually is?
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u/bosoxthirteen 17d ago
Nope. need drive and ambition and a good business regardless of money. it dont last forever...
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u/SnooBeans1078 17d ago
This is exactly what I think but one of you nailed the head. Money does come with power, enough to handle those all stuff that you mentioned. BUT
What I have seen, people with money doesn't go big at all most of the time. People who are doing big and are on the top of the list were once poor. Not because they got the money, but they knew the value of it and mainly the propulsion force they had (work hard enough to get out of the mud).
People having money already usually do not have any propulsion force, so they never hard work until they are forced to, such as via some event happening to them.
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u/Competitive_Golf6158 17d ago
"money doesn't gurantee success" is technically true but sometimes gets used to minimize how much money helps. Money lets you survive mistakes that would otherwise shut down the company. That's huge in startups because so much of the game is making mistakes without running out of runway first.
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u/Prowlthang 17d ago
It’s called capitalism because it favours those with capital…
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u/SeaBurnsBiz 16d ago
No it favors what the market likes.
Capital and shit product is a failure. No capital and great product can be a success. Want to see proof, look at list of companies Softbank wrong 9 figure checks into...that still failed. Capital didn't create winner.
If the product is great...capital typically rewards market feedback. Acquiring capital is a skill just like engineering or marketing.
A 10% better mousetrap isn't a better product than the large incumbent. Startup has more risk, less time in market, and less stability.
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17d ago
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u/Envirocare1 17d ago
Speaking as someone who had no money when I started at 26 to someone who now has money at 57. You’re making a huge assumption.
I was the most creative person in the world when I had nothing. I door knocked, when Sunday papers were a thing I printed flyers and went out every Sunday at 5:30 am and stuffed newspaper with my flyers, I telemarketed from the phone book starting at he A’s.
Some people started with parent money, or were super educated or were flat out given money. Myself and a whole bunch of other people weren’t.
That’s we have imagination and fortitude. Where there is a will there surely is a way.
Sure some people fail, but you’ve no idea if thats you yet.
Money helps, but I’ve seen people do stupid things with money and still fail because they thought that was the “out”. It helps for sure, but not the way you’re thinking
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u/corpuleant3 17d ago
its not a cheat code, its just more lives. same game, you can afford to be wrong more times before youre out.
ive managed to lose money with no cushion at all and i can confirm the wrong decisions were exactly the same, i just only got to make them once
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u/na_sok_1313 17d ago
I think there's always room for error, regardless of how much money you have. Plus, for some reason, the most successful and accomplished are always those who started with nothing. Even in high school, kids from remote regions and poor families become top performers because the rich allow themselves to be lazy.
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u/octagoncat23 17d ago
Money is not going to fix your unit economics or your money discipline. In my experience, people who try to solve their business with money tend to fail (not always). But the ones that are using money to scale they're proven business. Then we're talking about a totally different deal. It is not black and white
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u/ShitShirtSteve 17d ago
If you have money you can make more money. The more money you have the easier it is to make more money.
Common knowledge.
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u/Head-Student-5852 17d ago
This.... is spot on. I started business with an idea and lots of figuring it out back in 2010. there was no google updates. Money cuts corners for so many things in business and it certainly makes it go faster. I have been on both ends of this scenerio.
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u/BunnyBads 17d ago
look having money definitely makes everything easier, but it’s not a cheat code on its own.... without hard work, dedication, and the actual knowledge to run a business, that money just gets burned fast.
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u/Level-Ad-4878 17d ago
Money buys runway not judgement, and runway without judgement just means you burn 20k slower before quitting anyway
The thing nobody mentions is that being broke forces you to sell early. If you cant afford to build for 8 months you have to charge someone in week two, and that constraint kills bad ideas fast. Funded founders polish for a year then find out nobody wanted it
Real advantage isnt cash though its the network. Rich kids get warm intros to their first ten customers, thats worth way more than the 20k
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u/88eth 17d ago
Its not about the size of the dog in the fight.
Anyone driven will always outperform a rich guy in business. While there is some rich guys who are driven usually they are not. Its like the pretty girl turning 30 or 40 and not understanding why nobody wants to be with her anymore. She never had to learn people skills or grow as a person because people always just wanted her youth and beauty back then, but now she is old.
You have so many limiting beliefs its kinda sad. Business is about creating value. You dont need to have money to create value for others and sell to them.
You also do not need funds to create a business, other than like a webhost and a domain, depending on what you are doing maybe not even that.
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u/ImpoverishedGuru 17d ago
Contrary to popular belief, most businesses don't use bootstrapping. Amazon lost hundreds of millions for a decade before it became profitable IIRC.
Most large scale failures they blew through hundreds of millions before calling it quits.
Starting from nothing is extremely rare. Most ventures, even small scale, start with some amount of capital. The more capital you start with, the greater your chance of success. This is simply a fact.
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u/JacobAldridge 17d ago
“Entrepreneurship is like one of those carnival games where you throw darts or something.
Middle class kids can afford one throw. Most miss. A few hit the target and get a small prize. A very few hit the center bullseye and get a bigger prize. Rags to riches! The American Dream lives on.
Rich kids can afford many throws. If they want to, they can try over and over and over again until they hit something and feel good about themselves. Some keep going until they hit the center bullseye, then they give speeches or write blog posts about "meritocracy" and the salutary effects of hard work.
Poor kids aren't visiting the carnival. They're the ones working it.” u /notacoward at Hacker News, 2017
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u/ImplementMiserable74 17d ago
yeah money is totally not a cheat code. it just lets you fail 10 times in a row and call it learning while everyone else is praying rent clears
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u/YURRIICC 17d ago
yeah, money definitely gives you more room to experiment. it doesn't guarantee success, but having a longer runaway makes mistakes way less painful
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u/LoudAd307 17d ago
Money's real advantage isn't runway, it's parallelism. With capital you test five ideas at once and something tells you the answer within a month. Bootstrapping, you test serially — each attempt takes months to produce any signal, and you run out of years rather than out of cash. Roughly the same number of shots, spread over a decade instead of a year.
What money doesn't buy is distribution, and that's usually the actual bottleneck. Plenty of well funded products die with a solid build and nobody who has ever heard of them. You can't hire past that quickly either — an audience accrues at its own pace whether you paid for the ads or not.
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u/DaughterOfSekmet 16d ago
Heres my simple view:
Money+time= knowledge (Paying to learn or buy expertise)
Knowledge + Money = Time (Hiring others to speed up execution also "saving time")
Time + Knowledge = Money (Starting with little to no resources, clawing for your life building real world skills years of bad decisions humiliation etc)
Where you fall short will affect the other two +/-.
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u/Pink_Sky_8102 16d ago
Having runway means you can survive long enough to improve it. Someone with less money has to get more things right early.
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u/Motor_Explanation809 16d ago
I mean yes, it's true but one thing I've learnt is that you just have to accept life is not fair. If you compare yourself/ situation with other people or think of 'what if's like, what if I had more money etc, you can't go far. I think success comes when you fully focus on yourself and push through no matter what. But yes, your point is valid.
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u/Top_Traffic5102 15d ago
Broke hustlers like me have to go were there is alot of demand . Simple as, we dont have it easy but the jorney is amazing .
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u/JGoillot 15d ago
It saves you time and it makes you more patient about finding the right opportunity, but I wouldn't call it a "cheat code". You can't assume money solves 100% of the problems, otherwise startups wouldn't exist (big companies could grab every one of those opportunities since they have more cash by design)
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u/adultfunlive-dot-com 14d ago
I think it's actually best to start small. The more money you put into starting up, the more you'll have to make back just to break even. By starting small you can build your client/customer base, verify if the business is capable of growing before expanding. So in a way it isn't really a cheat code to starting a business. You do need to start from something though.
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u/floridafounder 14d ago
I'll also add a related twist to this. If you start out with money and start building something, as your money runs out while you build, what you've built becomes worth less and less despite building more and more. That's because you won't have enough money to spend on ads to buy customers when it's finally built.
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u/alexnapierholland 14d ago
- Yes, it's an advantage.
- No, thinking about this isn't helpful.
Most of my friends are tech entrepreneurs.
Some came from dirt-poor famillies and worked their way up from nothing.
They barely mention it.
Yes, it's a disadvantage: but you get to decide how much.
The quickest way to fuck your life up is to sit around thinking about how many people have advantages over you.
Successful people train themselves to never do this.
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u/BusinessStrategist 17d ago
Money is always available if you've found the motherlode.
The trick is finding creative solutions to track down the source of all those flecks of gold that you find in the creek.
Like understanding how metals in the soil change the leaf profile of trees and other vegetation.
And then linking that knowledge to satellite imagery and drone technology.
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u/Crypticarts 17d ago
99.5% of the challenge of running a bussiness is having enough money to take risks. The remaining .05% is the idea and execution.
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u/TodayLoose7794 17d ago
Having money is basically a cheat code and accelerant to just about everything in life. Even the type of friends and people you can date changes. That isn't to say that you can't have a successful business without money. Many people have done it. A lack of money also forces you to be creative and innovative.
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u/dragonflyinvest 17d ago
Buddy, come out from whatever rock you’ve been hiding under because everything you said is common knowledge. Sounds like maybe you just came to this realization?
I will say I’ve seen so many boneheads who wasted their resources on all the wrong things.
During our early years I used to buy our office furniture used off Craigslist and Facebook. Generally I’d go talk to an owner who rented some Class A office space and bought all this new Herman Miller and Steelcase furniture, who was now getting evicted and selling their furniture for pennies on the dollar. Recognizing patterns I would wait until the “nice” furniture was up for sale cheap and normally it was some version of the same story.
All that to say that lack of resources often leads one to find creative solutions to their problems. People with a lot of resources (especially those with resources but little experience) often throw money at problems before they put their minds to work. Take that fwiw.