I have roughly $50,000 of our money that I can commit to our startup while we build the prototype in preparation for raising money. We can live with family members -- so rent will be free -- so we estimate our cost of living to be $1,000 / month / person.

At $2,000 per month total -- this gives us 20 months to finish the prototype. We think we can do it in 3-6 months, but we recognize that our time estimates could be completely wrong.

Are these numbers reasonable? Should we save up a much larger amount of money, like $100k or $250k? How complete should a prototype be before raising money?

Here are some additional considerations: - My cofounder has $20,000 in student loans to pay. Should he pay them all off before quitting his job? - We have another $50,000 of money in 401(k)s and Roth IRAs. We're young enough to lose all this money and make it back without concern. Should we convert some of our retirement money into capital for our startup[1]? This would give us a total of $100k in funding.

[1]: http://guides.wsj.com/small-business/funding/how-to-tap-an-ira-or-401k-to-help-fund-a-start-up/