They Called It Severance. You Should Call It Seed Money

The average severance package in mid-2025 was 19.3 weeks. That’s also the length of time most new founders think they have before their business “has to work.”

So what does this mean?

The Data

The Challenger Gray & Christmas 2025 employment report tracked severance across eliminated positions. Mid-career workers received an average of 19.3 weeks of severance pay. For someone making $80,000 annually, that’s approximately $29,600 before taxes. The average cost to start a consulting business ranges from $5,000 to $10,000 according to the SBA Small Business Profile data.

What The 1% Does With It

Someone with institutional access sees 19.3 weeks differently than you do. They see it as bridge capital, not a countdown. They’ve already calculated the burn rate. They know their consulting business costs $7,000 to launch properly. They know they need approximately $6,000 monthly to live. They’ve modeled 16 weeks of income replacement while they build.

They’ve also seen severance packages structured as runway, not rescue.

That’s the lens. Severance is not compensation for losing a job. It is startup capital your former employer is funding because they eliminated your position. There is psychological permission in that distinction.

What The 99% Should Do With It

Stop treating severance like grief money. Treat it like a product launch budget.

Calculate your actual monthly living expenses. Be precise. Include rent, childcare, insurance, food, one category of discretionary spending. This is your runway cost. If you need $5,500 monthly to exist, 19.3 weeks of gross severance gives you roughly 16 weeks of net runway after taxes.

Now calculate your startup costs. Not your dream setup. Your actual launch. The consulting agreement template you’ll buy. The business registration. Basic branding. Website hosting. Professional liability insurance. Accounting software. Most of this lives in the $3,000 to $8,000 range, unless you use a tool like BUILD- which gives you everything you need to get started for less than $99.

You’ve just proven you have enough.

The remaining budget is your client acquisition investment. This is where you spend strategically. You’re not buying ads. You’re buying coffee meetings, a professional development course, or a structured program that teaches you to sell what you’ve built.

The women I’ve mentored with who survived severance runway weren’t the ones who stretched it longest. They were the ones who spent it fastest on learning the business model fundamentals. They knew that severance doesn’t scale. Revenue does.

You have the capital. Now you need the clarity. That’s the whole point.