by Dave Taylor

Created on: May 09, 2007   Last Updated: June 13, 2009

I raise money for a living. The classic catch-22 in business is how to get the fat wads of cash you need to do the clever thing you want to do without having done the clever thing you want to do in order to demonstrate that you should be handed fat wads of cash.

Here's how to break the catch-22.

First, keep your day job. Your day job is your first angel investor in your new start-up, and it's not taking any equity or back-end and requires only that you spend your days there and work. You're about to find out that those are really good terms for an angel investor, so treat your day job with respect. DO NOT do work on your start-up while at work at your day job or on your day-job equipment. Not only super disrespectful, but actually legally stupid, because you're handing ownership of your start-up to them.

A lot of people advise that you do not work in a field that is the same as the start-up, or you will get burned out. This is a good idea, and it will also help protect you from them if they turn litigious once they find out you're moonlighting.

If it's a similar industry, and for most of us it is, it's wise to draft a simple, one-pager agreement with a company executive saying that what you do on your own time on your own equipment is your own. A lot of people are scared to propose that their boss sign something like this, and there's a language to pitching it right. Practice on your friends before you do, to make sure you're not stumbling or saying it awkwardly, and don't ask via email or phone. Do it in a face-to-face meeting. Your pitch is that you love your job there, even though the pay is a little low, so you're doing this as a second night job to supplement the income and because you want to keep working there. You think the experience from this might also help you do your day job. If you're a valuable guy, most execs are going to say "no problem," because they don't want to lose you. Recruiting is very hard. You're about to find that out. If you're relatively useless and replaceable, you'd better not pitch this. In fact, you'd better look for a new day job anyway where you're more useful, because your job security is probably already more tenuous than you think, and you're going to need some job security for the coming adventure.

Second, you need a great idea. Great ideas are ones which meet a clear market demand (measurable is better) and which make people's eyes light up when you tell them. You'll hear comments like, "OMG, that's brilliant!" and "I can't

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