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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?

#51

Post by redorb »

_delirium wrote: post #45
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... )

I bet the above company does plan on some time in the future; having more "normal" and "market based" salaries; otherwise they could have worked anywhere for below market wages. They have to have a plan for making more money down the road that won't depend on their needs; but value.

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

#52

Post by dotBen »

michaelhalligan wrote: post #50
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?

You're either trolling or (may I politely point out) you risk coming across as one.

That's a whole different conversation, totally OT to the OP. I'd suggest you spin up another thread to debate that, or search the archives on hn.

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

#53

Post by michaelhalligan »

dotBen wrote: post #52
michaelhalligan wrote: post #50

Earlier quoted context omitted.

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?

You're either trolling or (may I politely point out) you risk coming across as one. That's a whole different conversation, totally OT to the OP. I'd suggest you spin up another thread to debate that, or search the archives on hn.

I'm really curious. Imagine you were at a party, and engrossed in a conversation about food. Honey comes up, so somebody asks a question about bee raising. Would you tell that person,

"You're either trolling this party, or (may I politely point out) you risk coming across as a troll in this party"?

Clearly I missed the part of the social contract which states, "Discussions may never, ever branch".

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

#54

Post by mikeklaas »

philwelch wrote: post #47
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.

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.

Sure, but what would you suggest we call the guy who is in charge of a 30-person company, then?

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

#55

Post by SteveMorin »

I am a big fan of bootstrapping so I do what I think is a common mantra on HN is pay your self as little as possible to survive. Once the company is profitable you can start increasing your salary to market rates.

After all your a founder you here to make something successful not pull a fantastic salary. Your a owner!

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

#56

Post by StavrosK »

_delirium wrote: post #45
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... )

And when the person who can contribute the least has the biggest financial needs, fun things happen.

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

#57

Post by DrJokepu »

mikeklaas wrote: post #54
philwelch wrote: post #47

Earlier quoted context omitted.

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.

Sure, but what would you suggest we call the guy who is in charge of a 30-person company, then?

Here in England, it's called a Director.

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

#58

Post by seldo »

michaelhalligan wrote: post #50
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?

You can search for prevailing wages here:

http://www.flcdatacenter.com/OesWizardStart.aspx

A database engineer in San Francisco is here: http://www.flcdatacenter.com/OesQuickResults.aspx?area=41884...

The levels are (very roughly): 1 = entry-level, 2 = junior, 3 = experienced, 4 = senior, usually with some management.

So they would be required to pay at least $92k; they can pay more if they want. However, it varies by area - the same DBA in LA would earn $3k less.

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

#59

Post by mortenjorck »

trustfundbaby wrote: post #31
kno wrote: post #22

Earlier quoted context omitted.

$33K is pretty low in most places in the US, How do you manage to stay focus on runing the business?

When you're running your own business you'll be surprised at how few expenses you have, especially if you don't have an office. I know for me, I absolutely must have $2000 to survive $2500-$3000 a month to be comfortable... anything over that is nice to have.

> When you're running your own business you'll be surprised at how few expenses you have

That certainly sounds counterintuitive to me. What did you think would be a cash sink that wasn't? I'm guessing there were more things you thought you'd have to pay someone to do that you found weren't so painful to take care of yourself?

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

#60

Post by philwelch »

mikeklaas wrote: post #54
philwelch wrote: post #47

Earlier quoted context omitted.

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.

Sure, but what would you suggest we call the guy who is in charge of a 30-person company, then?

"President" used to be the standard for smaller firms. (Used to be the standard for all firms, actually, until "CEO" was invented.)
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