I went through this when I started Spheric Technologies at 24 years old. I did save $70K to start, but quickly ran out of money after hiring 3 people (cashflow almost killed me). The company grew 150% year over year to 30 employees and was acquired in May of 2008.

How I solved the cash problem for hiring ... a few things.

1) Dynamic pricing. When a customer asked me the cost for a project or our rates, I always said it was contingent on the payment terms they could accept - 50% up front, Net 0, Wiretransfer for payments was 20% less then Invoice 30 days, Net 30, cheque in the mail. Here's the trick though - ask them first what they're willing to do for payment terms, THEN use the items above to negotiate :)

2) Hire a recruiting firm that can get you amazing talent at the price you need within 2 weeks - and negotiate paying them 3+ months out. That way, you can pre-sell the work, and feel confident you'll have someone solid to work on the project when it starts (2 weeks isn't un-reasonable to wait.) I set this up 9 months into the company, and it's what allowed me to grow so fast, and ensure we always delivered on the promise to our customers. That partner exists, find him.

Those 2 things 1) Customer Financing, 2) JIT Talent Pipleline can transform your business.

Hope that helps - feel free to request a call anytime to discuss the details.