Salary at Venture-Backed Companies

My statement that paying people excessively can make them less hungry is something that has been observed through experience. I'm not saying that this is always the case, just that it happens and is something to be aware of.

Sure, salary is a matter of supply and demand- which is why I'm advocating for more transparency so that all market participants can make decisions with more complete information of the market. But I'm saying that supply and demand SHOULD be dictated by value added.

I'm not necessarily saying that every company should pay within this range. Just that this is something to be aware of, and if there is significant deviation from these numbers, more thought should be put into the decision making process.

It depends on their circumstances. There are smart people who'll work for low salaries if there are genuine reasons to do so, but not many of them. Most of us can't afford to work for free anymore.

But if you offer too much compensation, management and employees may begin to feel fat and happy and lose the motivation to maximize long-term value for shareholders.

Ahem. :cough: BULLSHIT.

That said, most startup executives I've known were worth nothing near $175,000 base. Most of them could justify $175,000/year not to work anywhere in technology again. Then again, I've never worked for a good startup.

Alright... now, this is a fun topic. I worked for a startup with outright evil management where there were 5:1 salary disparities over the same job. One person was making $30,000 per year (in NYC) in a non-tech role, then busted his ass to move over to engineering and did so, but was told that the promotion to engineer "should be enough". People were being hired into the same role at 4-5 times his pay. He eventually negotiated more, but he was underpaid for years. That was the startup that inspired my most famous blog post.

The good news is that most startups pay market. Salary may be about 15% less than you'd get in another company, but equity (at valuation) fills the gap. The bad news is that most startups are awful places to work and you learn very little and so you tend to "job hop"; it may not even be your choice because "fail fast" is often used as an excuse for impulsive firing. After a while in that game, you have more jobs than years in your history and startups are the only market left for you.

But I'm going to assume this article references companies where the Technology department is more of a cost center than primary operations.

For example a SaaS company that basically just has sales/marketing and technology/operations, the CTO is also acting as the COO, so I think you could attribute the COO salary to that of the CTO in a SaaS or high-tech startup.

There's the income/profit metric (if a company is paying its CEO $200k+ and has several $150k+ engineers, they're obviously selling a significant amount of something)

Or there's the acquisition metric (our goal is to be bought, and we haven't been bought, so we're a startup)