Not true. Your individual state determines your obligations for receiving unemployment benefits. For instance, I live in Pennsylvania, and the three questions

Not true. Your individual state determines your obligations for receiving unemployment benefits. For instance, I live in Pennsylvania, and the three questions they ask are: 1. Did you work? In Pennsylvania you can receive unemployment benefits while earning some small percentage of income 2. Were you able and available to work? Meaning you weren't on vacation at the beach all week 3. Did you turn down work when suitable work was offered to you? You're obligated to take another programming job if you're a programmer already, but wouldn't get in trouble if you were offered a job as a janitor So depending on his state, he may be okay working on his startup during unemployment as long as he doesn't go looking for a real job.