“The current job market is leading young professionals to get creative,” Sam DeMase, career expert at ZipRecruiter, told Moneywise. “This is driven simultaneously by economic necessity and Gen Z’s desire for professional agency.”
That doesn’t mean the entrepreneurial road is easy for new business owners, especially one in their 20s starting a business for the first time.
“It’s maybe even a healthy pressure, like, well, what’s my thing?” Justus Shaw, 25, a former corporate mobile app developer, told The Wall Street Journal.
Moving on from the traditional W-2 corporate world, where he earned about $60,000 annually, Shaw launched a full-time coffee-cart catering start-up in 2025. The coffee cart rollout cost $7,000 to get off the ground, and Shaw said he had to financially support six staffers, who helped him earn $100,000 in gross revenue. But a healthy chunk of that cash is earmarked for current and future company expenses.
“The business has to make a lot more money for me to still walk away with some money,” Shaw told The Journal.
Making the freelance life a good financial fit
Shaw is not alone in launching a startup and almost immediately facing the financial risks that come with business ownership for younger entrepreneurs.
“Necessity founders can still build good companies, but they start with a shorter runway and less room to wait for the right customer,” Kira Shishkin, founder and CEO of informed.now, a San Francisco-based news research company, told Moneywise. “For instance, the risk I’d flag first is that a founder who needs income this month will take any revenue, often at prices too low to ever pay a salary.”
The good news is that with some wisdom, foresight and constant real-world testing, young entrepreneurs can build a career platform with their name on the door. That journey, startup experts say, requires following some hard-earned advice.
Get a good grip on day-to-day financial realities
There’s often a large financial gap between being traditionally employed and starting as an entrepreneur.
“You lose consistent base salary, bonus, medical coverage, 401(k), employer-shared taxes and paid days off,” DeMase said. “This adds up quickly to $15,000, in addition to the base salary loss.”
