Financing Your Leap: How to Build a Personal Fund

Alice MacNeil, Fresh Program Lead, shares a few thoughts, strategies, and resources on how to start investing in yourself and building a solid personal fund that will enable you to make the leap at Fresh. 

At Fresh Ventures, we are highly aware that self-financing is one of the most important - and uncomfortable - topics when deciding to apply to, or participate in, our Program. Making the ‘leap’ to an entrepreneurial pathway is not a simple decision and can involve a lot of thinking (and worrying) about money. How do I manage without a salary? When will I have a salary again? How much of a runway is enough? These are all questions I have had to ask myself when taking a leap in my own career. Now as Program Lead at Fresh, this article is intended to share a few reflections and strategies for how to build your own personal fund for your leap at Fresh.       

No matter your current situation - salaried, self-employed, or already self-funded - getting comfortable with the concept of financial uncertainty and instability always feels more complex than it ‘should’ feel like. And that’s ok. Thinking about whether an opportunity is a financially good idea for you is absolutely critical to pursuing the opportunity. It’s a key decision criteria. And so it should be. We all have financial commitments and personal contexts to take into consideration. 

We want to help potential and accepted applicants put themselves in the best possible financial position in order to get the most out of the Program experience. Ultimately, participating in the Program - and making the leap to build a systemic venture - is inherently about investing in yourself and recognising that you are your most important asset. 

Money Talks - Rethinking your personal relationship with money

A good place to start is the realisation that financial considerations aren't really that much about money. Not in isolation anyway. As Rob Symington, Co-Founder of Escape the City has argued:


“Money has no value without context. In the bank it may provide you with a feeling of security. But the prerequisite is that you value that feeling of security... otherwise it is just a number. In order to have congruence between your financial goals and your objectives in life, you need to set goals for what your money will ENABLE you to do.”  

To begin thinking about how to build your personal fund, we all need to start thinking about what our personal relationship with money is, and specifically, what has led to our relationship with finances in the past. The first step to do so is digging up the variables, habits, behaviours, and assumptions that have built up your own financial value system. 

Such variables could be anything from your values, family and cultural upbringing, to your personal capacity to more broadly manage uncertainty and risk-taking preferences. Also your personal perception of what a career should look like, the fear of taking a less common path and what others may think play an important part.

Personally, I feel the key to this is understanding that your personal financial system is about you and who is valuable to you, not anybody else. 

“However, the more aware we can be of our own behaviour and the more we can understand how our minds work, the more we can actively decide what we spend our money on. Just as spending money on worthless or short-term gratification is unsatisfying, spending money on things of genuine value can lead to a much more rewarding existence.” - Rob Symington , Co-Founder of Escape the City

How to build a personal fund 

Each entrepreneur’s path is unique in its own way. Different backgrounds, different ideas and different contexts make it so that everyone’s personal starting point will be very different - but the process of discovery is the same. Here’s 5 strategies you can use to build your personal fund.

  1. Financial Needs versus Wants

Once you have a deeper understanding of your own financial value system, and where it comes from, the next step is to identify your financial needs and wants. And then begin to build your personal fund around that. 

Financial needs cover what are the minimum costs you need to make ends meet each month, and which costs you have less flexibility around. These could be mortgage, rent, healthcare, childcare costs, and student debt, for example. On the opposite, financial wants are lifestyle considerations, which could be considered flexible costs. They may include costs like gym memberships, eating out, social events etc.  

Ultimately, this division is entirely dependent on what you personally consider to be your true financial levers and what you feel you can play around with. What could be a ‘want’ for some, may actually be considered a ‘need’ by others. A personal example - in reviewing my finances for my leap, I wasn’t willing to compromise on a monthly climbing wall subscription (too important for wellbeing), but instead felt happy to abandon using public transport and bike around London (yes, even in torrential rain storms) to get to places. While this may seem upside down for many people, it worked for me, and meant I had cut a cost that was three times as expensive as my climbing membership. (A nice side benefit was that I now know London like the back of my hand from cycling everywhere).   

Overall, it is critical to be really realistic about what levers you are willing to (and can) pull to build your personal fund. And importantly, it also doesn’t mean you need to be medieval about it and deprive yourself of that flat white from your favourite coffee place. Ensuring a healthy wellbeing (alongside financial health) is just as critical to making a successful leap.

  1. Setting Financial Objectives 

The next step is to get concrete about the financial objectives that will enable you to take the leap. Key questions to consider in this step are:

  • What opportunity / direction does the fund need to cover? (e.g. participating in the Fresh Program)
  • How many non-income months does the fund need to support? (i.e. a ‘runway’) 
  • Do you want to build an emergency fund on top of the personal fund?
  • When does the fund need to be in place by?
  • What is my initial estimation of how long it will take to build the fund securely?
  • Are there hidden costs that you need to be prepared for?

For me, I knew that my fund needed to first cover a three-month no-income period where I wanted to give myself a break. Second, from speaking to friends, family, and doing my own research, I estimated that it could take six-months in total to establish new income opportunities. So already that was nine-months of potentially no-income my fund had to cover. Finally, I wanted an emergency fund in case of, well, emergencies. In total, this meant I needed a fund to cover a year of no-income as a baseline. While this was a scary realisation, it felt good to feel discomfort - as it meant that I was on the right track to taking a leap. 

  1. Routines to change the system

Making a fund plan is futile if not complemented with a change of routines and habits to make the plan succeed. How to identify which new routines can help you build that fund and ultimately your financial system? Here’s a few of the routines that helped me: 

  • Carving out time each week dedicated to planning, budgeting, and tracking progress. A tip:- check if your bank offers an easy budget or savings tracker.
  • Putting in place accountability checks - such as with a good friend - to ensure you stick to your plan.
  • Start living on your new (imaginary) lower income and see how it feels, and ask yourself whether this is feasible or if you need to tweak your financial needs/wants well in advance of needing the fund.
  • Tracking progress against behaviour changes, as well as financial targets, as building a personal fund is also ultimately about shifting the habits of your financial value system.

Overall, the earlier you start practicing your new financial plan, the easier it becomes to take the leap at the right time for you. 

  1. Cash (Flow) is King

According to their own specific situation, everyone will have different financial levers to pull on to raise their personal fund. Some will be currently on a salary, others will be freelancing or even studying. But whatever your current income model, one of the most useful financial levers in raising a personal fund is cash flow. There is a lot you can do with your current income and costs that can help you build a fund. Here are 3 levers examples:

  • Spend less. 

An obvious starting point is spending less, so as to have more net income at the end of the month. This is where already going through an analysis of personal  financial needs versus wants is important - from this division, you can then make cash flow gains in cutting down on your financial wants. The flat white versus homemade coffee debate. 

  • Make sure your salary works for you.

Talking to your employer about a pay rise, or even reducing the number of days per week you work, or changing your vacation pay, can help in raising a fund. Brushing up on your negotiation skills with your employer can go a long way to helping you boost the health of your monthly cash flow. 

  • Turn your current liabilities into assets.

This can mean to rent out your spare room in your house (if you have one of course), to release more spare time in your working week to earn income from a different source. This second one is a great way to build up a freelance portfolio in parallel to your current job.  

  1. Sustaining the Change

Once you’ve started to change your financial routines to build towards a fund, one of the hardest things is to sustain this change - which is why it is key to practice your new financial routines before you need the fund. Additionally, staying connected to your purpose for a fund is important - this could also mean joining a community who are on a similar path to you.

Want to learn more? Here are a few recommended readings: