Should I leave my job and go full-time on my startup?

The prudent legal answer is clear: yes, you should leave your day job before starting your startup.

However, we realize this is no easy decision. A startup is inherently risky and uncertain, and people by nature don’t like change. Leaving the stability of a job with a steady paycheck, benefits, and predictable career path can be anxiety-inducing. As a result, many founders opt to moonlight while testing their startup idea.

Still, there are certain considerations we advise founders to weigh.

Fiduciary Duties and Restrictions: As an employee, you owe your employer certain fiduciary duties: a duty of loyalty to act in your employer’s best interest and avoid conflicts of interests; a duty of care to perform your job in a reasonable and professional manner; a duty of good faith to act honestly with your employer. You may also be subject to restrictive covenants related to non-competition and non-solicitation depending on your employment agreement and applicable state law. Moonlighting often conflicts with these obligations, which can lead to legal trouble.

Intellectual Property: As an employee you are regularly exposed to your employer’s IP. The ownership of any work product/IP you produce for your employer is likely assigned to your employer. Moonlighting increases the risk of inadvertently using your employer’s IP when building your startup, which, when your startup becomes successful, may give your employer claims for damages and/or ownership in your startup.

Fundraising: To attract investors, founders should be focused and committed. A founder with a day job appears, at best, as distracted and indecisive. This raises a bright red flag for investors who already face substantial risks in backing a startup.

Passion: We find that successful startups demand passionate and focused founders. Passion is critical to motivate you through the frequent challenges, long hours, and emotional rollercoaster of a startup. If you’re hesitant to leave your job, it’s worth asking yourself whether startup life is right for you. There’s no shame in choosing the stability of your job, but trying to balance your job while moonlighting may signal to yourself that you lack the needed passion and focus to take the leap.

As a final thought, though leaving your job is tough and anxiety-inducing, we find that most founders don’t regret the decision. Even if a startup fails, founders unleash creativity, gain autonomy, and experience opportunities for personal and professional learning, maturity and growth unmatched in a traditional job.

The outcomes are uncertain, but the journey is often very rewarding.