Not a filtering function - I know of a few founders who scrapped by on Medicaid and food stamps for years to build a successful business by they had no savings
yeah a lot people can't do that. Specifically anyone caring for someone, so like 50% of adult population. A huge proportion of adults are caring for a parent or child.
Its also impossible if you have any health problems, or need to save for retirement or have student loan debt.
Its really only possible if you're young and healthy, so this would filter out probably 80% of adult population
You could but it gets much harder that way and the likelihood of you failing goes up significantly. It is more risk averse to the VCs to cut a decent size check which ensures founders are not struggling for basic needs and can actually focus on the startup.
It is a filtering function and it's the wrong filtering function. Like others have said, it filters out anyone with a great idea who is unwilling to put their lives in danger, or more importantly the lives of people dependent on them.
They don’t know at onset if a company deserves that much money. $25k is enough to see what people can accomplish in 3 months - maybe they take less equity. Most companies either have wrong leaders, wrong market, wrong skills, wrong business ideas but big dreams. That amount is enough to filter through the above.
