startup-costs, funding, seedI’ve always been interested in startup stories and I’ve read about several stories how founders were on various forms of government provided social-welfare before they made it big.
These stories usually come in the form of: “My family and I were on welfare, so I worked very hard day and night to build [insert product here] and I became a millionaire/billionaire.”
Once you look more carefully you will notice that they usually had the opportunity to get a middle-class job and provide for their family, instead they chose to chase their dream at the expense of the tax-payer.
I’m starting to see a pattern of people using government provided welfare as a form of startup seed founding in the sense that they can provide the basic necessities for their family while they work on building their future.
Some examples of the aforementioned is the “WhatsApp” founders (WhatsApp Co-Founder Jan Koum Once Lived On Food Stamps) and Casey Neistat, both of which used government benefits to survive while building their products/service/skills. I’ve read about many others and even saw a documentary about a beverage company that did the same thing.
Personally, I’ve seen two success stories in the form of a family relative who essentially (used…possibly abused) welfare until he made it big in his IT company. Also a now rich friend who lived in the projects and collected welfare while building his baking company.
Questions:
Is using government welfare/unemployment knowing that you can get a new job, but refuse to do so by stating “the job wasn’t a good fit” legal? Clearly, you are not forced to take the first job offer while on unemployment.
If you become successful, do you have to pay back that welfare money?
Is this morally correct?
If I have the opportunity to provide my family the basics by living at my parents home while collecting welfare, unemployment, food-stamps, medicade, and so on. Should I do this as a way of starting my software company? I have a good amount of money stashed away, but why would I use that when I can use these benefits first.
ok. I’ll give this a go.
my problem with the question is it has no definitive answer and is broadly opinion based depending on where you sit within the political spectrum. It also is worded in such a way to suggest a negative opinion of welfare.
My views on welfare are that it is broadly analogous with limited liability for corporations. They both provide protection from negative outcomes. Limited companies allow entrepreneurs and business owners to take risks and push boundaries without ending up in debtors prisons.
Similarly welfare allows people to take risks with job prospects and opportunities without starving, especially in the current job market where job security is rare. It allows people to become artists or take jobs that don’t necessarily have stability like joining a startup. Knowing that if it folds for whatever reason the state will catch them when they fall (as they catch large corporations when they collapse).
In countries which have low job stability and low welfare you see unprecedented incidences of young people flooding into medical degrees looking for job security (See South Korea after 1997 financial crisis - the least popular of the 27 universities medical degrees became more difficult to get on than the best engineering degree at the best university - unofficial data)
So from my point of view welfare creates a diverse workforce which benefits everyone.
So, in my view it is not necessarily morally wrong to initially use welfare to test out an idea or employment opportunity if you have a plan (i.e. business plan) which will lead to off welfare as welfare is a safety net not a home. Especially if it will lead to employing others, as then the welfare you have received will remove others from welfare also saving more money than you received multiple times.
“If you become successful, do you have to pay back that welfare money?”
I think that everyone has an moral duty to pay taxes back into the system, which is how you repay it.
“If I have the opportunity to provide my family the basics by living at my parents home while collecting welfare, unemployment, food-stamps, medicade, and so on. Should I do this as a way of starting my software company? I have a good amount of money stashed away, but why would I use that when I can use these benefits first.”
See above. I see nothing wrong with accepting state aid for a time when you have a plan to get off it, corproations and capitalists appear to have no quarms in accepting tax deductions or subsidies when they have cash in the bank. Much better to look after the people who can’t easily look after themselves rather than those with the money already who can.
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