Crates was born c. 365 BC in Thebes. He was the son of Ascondus, and was the heir to a large fortune, which he is said to have renounced to live a life of Cynic poverty in Athens. Diogenes Laërtius preserves several different accounts of this story; one of them has Crates giving his money away to the citizens of Thebes, apparently after seeing the beggar king Telephus in a tragedy; whereas another account has him placing his money in the hands of a banker, with the agreement that he should deliver it to his sons, unless they too became philosophers, in which case he should distribute it among the poor.