Undercapitalization is one of the most common reasons a company fails. Have successful businesses been started with $5,000 or less? Sure. But don't drink the Kool Aid. Lesson #1: it usually takes a lot more than $5,000 to get a business going and to sustain it long enough to reach break-even. In your case, just think of it this way: any salesman worth his salt is unlikely to work for less than $5,000/month...
Lesson #2: at the age of 24, if you don't have even $5,000 worth of savings that you can afford to blow and need to borrow that amount from family, you should probably take a step back and think long and hard about your financial priorities. Depending on your ___location and your education and/or skills, you can probably earn $5,000/month, if not substantially more, working for someone else. Yeah, that's not as cool as starting a business, but opportunity costs are greatest at your age. What's really not cool: wasting away your twenties and having nothing to show for your efforts once you hit 30. Sure, everybody in StartupVille is always one venture away from a big exit or a $100,000/month business, but when you go to conferences and meetups and see thirty-somethings who have no net worth because they've been swinging for the fences since they were 20, it isn't pretty. Bottom line: at your age, in the absence of substantial existing savings or alternate sources of income (a trust fund, etc.), working on anything that requires you to "work for free" for any length of time is likely to be really, really harmful to your finances in the long run.
I agree with the general gist of your comment, but I think your "bottom line" is overly harsh.
I went to college from 20-24 (I had worked for a gap year before then), took about 6 months off to finish a volunteer project I'd started in college, worked for another 2 years, took another 18 months off to work on a startup (that never made any money), and then have been working since then. I just hit 30. My social security statement looks like $money, $0, $0, $0, $0, $money, $money, $0, $money, $money, $money. Except that each time I hit $money again, the amount is double what it was before. My net worth is doing fine - if I didn't live in the Bay Area, I could probably buy a house free and clear in most parts of the country.
Your 20s are the best time to take financial risks. After you get kids and a mortgage, you have responsibilities that really do make it difficult to spend any length of time without an income. But in your 20s, you can live cheaply, you don't have anyone depending on you, and you're still figuring out what you want to do with your life. Taking some time off from the corporate meatgrinder can pay some big dividends in increased skills and self-knowledge that make it more than worthwhile later.
Just be smart about it. Don't throw good money after bad, know when to call it quits, keep in mind what you want to gain from the experience, and remember that there's nothing shameful about getting a job.
By the way, I see from your past Ask HN submissions that in the past ~60 days, you've been thinking aboout "an opportunity in creating an ad network for a niche market" and looking for ways to accept payments for iPhone apps you've developed. Since your business here is apparently unrelated to these, I'll add lesson #3: if you're going to start a business, you must be 100% focused on that business. When you keep taking your eyes off the road, you're more than likely going to crash.
The ad network idea started when my cofounder here first got his other job.
You're definitely right though. I appreciate your insight in both of your posts re: the opportunity cost of running a startup at my age. I have a degree and could get a decent job. Sometimes it's good to see reminders of that option, since I've always leaned towards starting my own business.
bootstrapping usually means both getting a good job working for someone else and running your own business. Getting to the point where you can pay your own rent from your bootstrapped business is a huge milestone; one that will take serious effort to achieve.
Lesson #2: at the age of 24, if you don't have even $5,000 worth of savings that you can afford to blow and need to borrow that amount from family, you should probably take a step back and think long and hard about your financial priorities. Depending on your ___location and your education and/or skills, you can probably earn $5,000/month, if not substantially more, working for someone else. Yeah, that's not as cool as starting a business, but opportunity costs are greatest at your age. What's really not cool: wasting away your twenties and having nothing to show for your efforts once you hit 30. Sure, everybody in StartupVille is always one venture away from a big exit or a $100,000/month business, but when you go to conferences and meetups and see thirty-somethings who have no net worth because they've been swinging for the fences since they were 20, it isn't pretty. Bottom line: at your age, in the absence of substantial existing savings or alternate sources of income (a trust fund, etc.), working on anything that requires you to "work for free" for any length of time is likely to be really, really harmful to your finances in the long run.