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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?

#71

Post by trustfundbaby »

mortenjorck wrote: post #59
trustfundbaby wrote: post #31

Earlier quoted context omitted.

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?

yeah ... people think they need to get an office, a phone, fax machine, virtual assistant, whatever ...

When its just you, or you and one other person, you can work from home, use skype (+rebtel if you do international remote work), direct calls to your phone ... get a cospace if you really have to have an office. Apart from taxes, there isn't that much overhead if you play it right.

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

#72

Post by jmatt »

cullenking wrote: post #48
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

Ya that's a lot of money. It makes sense that if you are concerned with VC backed executive salaries $999 is probably a minor expensive. Google had a link to an older one on scribd:

http://www.scribd.com/doc/13743949/2008-Compstudy-Report-in-...

NOTE: In the description it states this is an abridged version. It looks like the detailed version(s) are what cost so much money.

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

#73

Post by dotBen »

michaelhalligan wrote: post #53
dotBen wrote: post #52

Earlier quoted context omitted.

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".

I'm curious what's wrong with someone suggesting that you might be coming across as trolling.

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

#74

Post by staunch »

DrJokepu wrote: post #57
mikeklaas wrote: post #54

Earlier quoted context omitted.

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.

In the US a "director" is anyone on the board of directors.

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

#75

Post by pmjordan »

staunch wrote: post #74
DrJokepu wrote: post #57

Earlier quoted context omitted.

Here in England, it's called a Director.

In the US a "director" is anyone on the board of directors .

That's true for UK companies too - there can be (and often are) multiple directors. In fact, unless there were a lot of founders, I'd expect all of them to be directors, at least initially.

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

#76

Post by wlievens »

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?

General Manager

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

#77

Post by whyleyc »

portman wrote: post #68
techsupporter wrote: post #65

Earlier quoted context omitted.

Genuine question: Why shouldn't a founder be putting aside savings? Does savings include any accumulation of money, or just liquid cash and allows for retirement planning? I understand that the founder is being paid with venture capital, but what is supposed to happen if, even against the founder's every desires, the business goes bust, the founder is no longer able to work for some reason, or a myriad of unintention…

That's a great question. The financial goal of a startup is (often) to generate a lifetime of wealth in 3-4 years of intense work. After 3-4 years, a startup will either succeed or fold. Because the timeframe is bounded , it's possible for a founder to forgo any personal savings without irreparably damaging their personal finances. For example, speaking for myself, at my last job I was saving about $60,000 per year.…

"The financial goal of a startup is (often) to generate a lifetime of wealth in 3-4 years of intense work"

That's just one class of startup. I'm sure the founders of Balsamiq and 37Signals which represent two of the better known "Business as a lifestyle" startups would beg to differ with you.

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

#78

Post by cloudsafe »

There is no fixed sum.

But if you are a skilled professional you should calculate "opportunity costs":

If you could get a job with 250k payment and you pay yourself only 50k - you are theoretically loosing 200k a year.

If the same startup generates 200k of profit for the first year and you own 50% if it you are still loosing 100k.

Then again if this startup could be sold right now for 500k - your up 150k.

Next step would be probabilities:

If you have no offer on the table but there is a 80% chance your startup could be sold for 1m, calculate with 800k. And stop adding this extra value if your exit probability is low.

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

#79

Post by michaelhalligan »

dotBen wrote: post #73
michaelhalligan wrote: post #53

Earlier quoted context omitted.

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".

I'm curious what's wrong with someone suggesting that you might be coming across as trolling.

Might I recommend reading http://www.amazon.com/How-Win-Friends-Influence-People/dp/06...

It's helped me immensely in getting over my geekdom, and learning how to relate to people easier. Your mileage may vary.

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

#80

Post by chrisaycock »

DrJokepu wrote: post #57
mikeklaas wrote: post #54

Earlier quoted context omitted.

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.

England has "managing director" for the CEO.
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