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Ask HN: How much do founders pay themselves?

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Re: Ask HN: How much do founders pay themselves?

#41

Post by lanstein »

blacksmythe wrote: post #39
vaksel wrote: post #4

$400K...you are the CEO...you gotta get paid like one. In reality it's how much you can afford. If you don't need money..pay yourself $1. If you need $15K to live on...pay yourself $15K. At least until the company is profitable. Once it's significantly profitable, you can afford to pay yourself more.

CEOs of small companies don't make $400k. CEOs that have run a successful business before might make $250k-$300k in Silicon Valley (a high salary area, to be sure). $250k would probably be the high end for a CEO of a 30 person company, if the CEO had not had a major success before.

I think you missed the humor.

Re: Ask HN: How much do founders pay themselves?

#42

Post by aneth »

A related issue that I don't see addressed in the comments is the trade off between salary, opportunity cost, and equity.   If there are two founders, one who could earn $150k, and the other who could earn $50k, should the former always get three times the latter in compensation, given equal commitment?  If there is no salary in a bootstrapped startup should one get three times the equity (or at least some portion of allocation)?  If both have the same market salary, but one has greater need, should the one be paid more? Should they in consequence get less equity?

All difficult questions I don't have an answer for.  

Re: Ask HN: How much do founders pay themselves?

#44

Post by blacksmythe »

lanstein wrote: post #41
blacksmythe wrote: post #39

Earlier quoted context omitted.

CEOs of small companies don't make $400k. CEOs that have run a successful business before might make $250k-$300k in Silicon Valley (a high salary area, to be sure). $250k would probably be the high end for a CEO of a 30 person company, if the CEO had not had a major success before.

I think you missed the humor.

I apologize.

My take was that the job of running a 30 person company was being equated with running Enron. Actually, someone who can successfully run a 30 person company is worth more.

Re: Ask HN: How much do founders pay themselves?

#45

Post by _delirium »

portman wrote: post #33

A lot of people seem to be saying "market". But for us, it was based entirely on need. After talking to our families, each of us came up with the minimum salary required to maintain our current lifestyle. The idea is that a founder should not be saving any money, but they also shouldn't be forced to move into a smaller home or stop eating out. What's interesting is that this produced 3 very different salaries, even t…

Interesting--- salary based on need, while contributions presumably are based on strengths of each founder. I've heard that compensation strategy somewhere else... ;-)

(http://en.wikipedia.org/wiki/From_each_according_to_his_abil...)

Re: Ask HN: How much do founders pay themselves?

#47

Post by philwelch »

blacksmythe wrote: post #39
vaksel wrote: post #4

$400K...you are the CEO...you gotta get paid like one. In reality it's how much you can afford. If you don't need money..pay yourself $1. If you need $15K to live on...pay yourself $15K. At least until the company is profitable. Once it's significantly profitable, you can afford to pay yourself more.

CEOs of small companies don't make $400k. CEOs that have run a successful business before might make $250k-$300k in Silicon Valley (a high salary area, to be sure). $250k would probably be the high end for a CEO of a 30 person company, if the CEO had not had a major success before.

This isn't the first time I've said this, but "CEO" sounds like a pretentious title for the head of a <= 30 person company.

Re: Ask HN: How much do founders pay themselves?

#48

Post by cullenking »

fnazeeri wrote: post #26

Check out http://www.compstudy.com/ It's an annual survey of private "high potential" companies (about 2/3 VC backed) executive compensation. You can find detailed data on base salary, target/actual bonus, equity and more for various stage companies. It's the "Kelley Bluebook" of startup executive compensation.

Would be cool if it wasn't, you know, $999

Re: Ask HN: How much do founders pay themselves?

#49

Post by cullenking »

I know you mentioned VC funded startups in the original post, however it seems this is becoming a digest for all interested parties to share/get info on startup salaries, so I'll chime in with numbers from our bootstrapped company, http://ridewithgps.com

I am pulling $1k a month from our business, which is a bit under what we bring in right now. It allows me to focus less on outside money and more on the business, and, as soon as we get more, I will be able to take $2k. This is bare minimum for me to live off of, and I'll maintain it here until my cofounder is able to come on at $2k and make his bare minimum to quit his dayjob.

After that, salaries can increase as revenue increases, up to "industry standard" wages. We are currently an S-corp, so we have to figure this out, which is turning out to be kinda tricky. According to the IRS, is a founder considered a CEO if the business has no CEO? Does that mean if we don't take $150k a year in salary we are going to get the hammer from the IRS? Trial by fire!

Re: Ask HN: How much do founders pay themselves?

#50

Post by michaelhalligan »

seldo wrote: post #37

My co-founder doesn't have a salary (though he does get our health benefits). I'm on an H-1B so my salary legally required to be "market rate", as set by the US government for my job title and location (a fact apparently not very widely known).

I've known several DBAs on H-1B's who were paid severely under market rate for what they were doing. How is "market rate" defined?
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