I can't say that I recommend this, Dustin. Although you will probably have little or no penalty for withdrawing such a small amount, you are still selling the investments in the Roth IRA at a time when the market is going up rapidly. Cashing out retirement early to fund something is a bad habit to get into, especially at a young age. If you keep running to your Roth IRA everytime you need money, you will have nothing left when you actually retire.
Besides, $10,000 isn't a lot to live on without a job, and would probably be gone pretty quickly, especially given the volatility of launching a tech startup. There are two different routes that I would take:
- Build up some CASH as quickly as possible. I would make yourself a goal of saving $20,000 in the next 12-18 months, which will give you $10,000 as an emergency fund and another $10,000 as startup funds for the business. Sell stuff, live on nothing, get an extra job.
- Start the tech business part-time while you continue your full-time job. Once you sure it is bringing in some real income, then you can make plans to gradually shift into doing that full time.
Either case requires lots of extra time and work, but your retirement account will thank you later for not cashing it out (that $10,000 will most likely be over $500,000 when you reach retirement age).