Amy Errett

Founder and CEO, Madison Reed

Errett started her career in investment banking at Bankers Trust. From Wall Street, she’s gone on to start several ventures and applied her operating skills as general partner of the venture firm Maveron. With Madison Reed, she delivers hair care products without going to the salon.

For her first startup, she withdrew from her 401k plan (paying the penalty to have enough cash to pursue her vision). She quit her day job three months after she had her big idea, with a clear grasp on how much money she had as well as the amount of time she had to secure funding.

Here is her checklist before leaping into entrepreneurship or working fulltime on a startup:

Make sure the total available market is large enough to invest your time and support your lifestyle.

Decide on your purpose: Is it to make money or is there a bigger social mission behind your drive?

Figure out what risks you are truly comfortable with, i.e. financial, as well as reputation and time.

Create a budget for yourself and your business idea and plot out how much financial risk you can really take.

Critically assess your ability to raise money from friends, family and potentially outside investors.

After striking out, maximize the skills you have gained from your job by matching them to what you’ll need daily as an entrepreneur.