I kind of took the route of #3. Granted we didn't really fail because technically we never started the company (but we did do a lot of market research and plann

I kind of took the route of #3. Granted we didn't really fail because technically we never started the company (but we did do a lot of market research and planning). My "expertise" from having gone through those stages was enough to get me hired at the company we were going to compete against. I think that if you're a bright enough person with the motivation to start a company, you'll be fine in the long run. Sure, the months after failure will suck, but you'll bounce back if you're motivated.