at wepay the founders are the lowest paid employees in the company
How much?
Ask HN: How much do founders pay themselves?
11–20 of 81 posts
Re: Ask HN: How much do founders pay themselves?
#12Jason Calacanis had an interesting segment on this on his show. They say $50-100k.
http://www.youtube.com/watch?v=kloJQ0EjgTE
Re: Ask HN: How much do founders pay themselves?
#13in the UK various funding bodies (eg. SMART) approve a founder salary of up to £40k, approx $60k, in line with other posts here.
Re: Ask HN: How much do founders pay themselves?
#14You pay yourself a reasonable living salary, based on location and living expenses. It usually has to be approved by the board, but so long as it's reasonable, you should be OK. The idea is that you're not getting rich off your salary, you should be focusing on growing the company to get rich off your ownership stake. At the same time, you shouldn't be starving, because that will cause you to spend more time focusing…
You make a good point in your "You shouldn't be starving[...]" sentence -- One of the biggest productivity killers in my life is dealing with, or even worrying about personal finances. As a founder, if you decide you want to go get a few beers with friends and grab dinner, you shouldn't then have to worry about how you're going to recover the $30 you spent outside your budget. The key here, I think, is to pay yourself "enough to live in a manner that allows you to focus solely on your business and productivity."
Re: Ask HN: How much do founders pay themselves?
#15Here is my experience: first 1.5 years, nothing. Then $60K for the next year. Then as profits went up, it reached $120K. Stayed there for several years. Then profits went up more, $200K. Now at $275K.
Re: Ask HN: How much do founders pay themselves?
#16The advice I have been given is that the founder salary should be market rate for skills/experience, but the actual check should be for bare living expenses. Ramen profitable is when you have the cash flow to sustainably sign the checks; profitable is when you can pay your own salary with backpay. This way you spell out your commitment/opportunity costs for potential investors and yourself while keeping cash requirements limited.
As I understand it, there are also some tax/legal issues regarding setting salaries since corporate profits and wages are taxed differently. This is what an accountant is for.
Re: Ask HN: How much do founders pay themselves?
#17I don't think founders should take giant salaries. At the same time, if you have funding, I think you should pay yourself enough to be comfortable.
People do short-sighted things when they are desperate. I think super low salaries increase the risk of burning out, giving up, or taking a more attractive offer. I think quitting for one reason or another is the biggest risk to a startup's success.
Re: Ask HN: How much do founders pay themselves?
#18Off-topic from the OP's question, but if you're incorporating as an S (for example, although other pass-through entities are similar), you need to pay yourself a "reasonable and appropriate" amount as salary. That is, you can't just pay yourself $1/year in salary and take $500K off in K-1 distributions (thereby avoiding FICA and other payroll-only withholdings). The IRS will tag you for that in a heartbeat.
Re: Ask HN: How much do founders pay themselves?
#19I think 30% discount to what you would take in the open market.
Re: Ask HN: How much do founders pay themselves?
#20Here is my experience: first 1.5 years, nothing. Then $60K for the next year. Then as profits went up, it reached $120K. Stayed there for several years. Then profits went up more, $200K. Now at $275K.
$275K not bad by most standard, you earned it!