It seems like the real path to retirement is be that guy who gets a startup funded and promptly write yourself the $1M yearly check
You'd need board approval.
I surveyed 500 startup founders about their salaries
21–30 of 104 posts
Re: I surveyed 500 startup founders about their salaries
#22I think what people often blissfully miss about founder comp is that the business literally supports the founder's entire life. Everything is a business expense. Pay yourself 50k as a little bonus and run almost everything through the business, because if you don't survive, neither does the business. You think founders are paying out of pocket for their fancy SF and NYC apartments at 50k per year living humbly? Think…
In what kind of startups is this happening in?! Edit: in our early days, if one of the co-founders did this, we definitely would've parted ways.
I've also seen cases where pretty well-funded startups (and, honestly, not just startups, I've also seen this with large public companies) have tons of expenses flow through a founder's/upper level exec's personal credit card. The expenses are all legit, but this results in at minimum multi tens of thousands of dollars in credit card bonus points accruing to the exec.
Will let you decide how ethical that is (or not). After all, many/most companies allow their employees to keep points earned for business travel. But it's one thing for an employee to keep bonus points for expenses they themselves incurred, which is very different, I think, than putting tons of corporate-wide business expenses through one person's card.
Re: I surveyed 500 startup founders about their salaries
#23I think what people often blissfully miss about founder comp is that the business literally supports the founder's entire life. Everything is a business expense. Pay yourself 50k as a little bonus and run almost everything through the business, because if you don't survive, neither does the business. You think founders are paying out of pocket for their fancy SF and NYC apartments at 50k per year living humbly? Think…
In the short-term this might work, but if you're trying to build a company that grows, then it doesn't work so well, because other people you hire will ... want the same thing.
If you expense your cell phone bill every month, then it's reasonable for other employees to expect the same, if they're also using it for work.
Better to get the board to sign off on a slightly higher salary to offset these expenses, IMO.
Re: I surveyed 500 startup founders about their salaries
#24I think what people often blissfully miss about founder comp is that the business literally supports the founder's entire life. Everything is a business expense. Pay yourself 50k as a little bonus and run almost everything through the business, because if you don't survive, neither does the business. You think founders are paying out of pocket for their fancy SF and NYC apartments at 50k per year living humbly? Think…
> think founders are paying out of pocket for their fancy SF and NYC apartments at 50k per year This is tax fraud. More realistic: cell phone bills, car expenses and home internet.
Founders can have a little tax fraud, as a treat.
Re: I surveyed 500 startup founders about their salaries
#25I would love to see a longitudinal study on this - is this similar to 10/20 years ago? Has the VC world really changed? Can it get better?
Re: I surveyed 500 startup founders about their salaries
#26I think what people often blissfully miss about founder comp is that the business literally supports the founder's entire life. Everything is a business expense. Pay yourself 50k as a little bonus and run almost everything through the business, because if you don't survive, neither does the business. You think founders are paying out of pocket for their fancy SF and NYC apartments at 50k per year living humbly? Think…
> think founders are paying out of pocket for their fancy SF and NYC apartments at 50k per year This is tax fraud. More realistic: cell phone bills, car expenses and home internet.
It all really depends on your situation and context. Does your company have an office yet? If not it's probably the founder's residence. I've heard of apartments listed as offices in very early days. It's not about committing fraud, it's about working with what you've got. But for sure paying founders a low salary and running everything through the business is a tax-conscious strategy to minimize overall expenses.
Re: I surveyed 500 startup founders about their salaries
#27I think what people often blissfully miss about founder comp is that the business literally supports the founder's entire life. Everything is a business expense. Pay yourself 50k as a little bonus and run almost everything through the business, because if you don't survive, neither does the business. You think founders are paying out of pocket for their fancy SF and NYC apartments at 50k per year living humbly? Think…
> think founders are paying out of pocket for their fancy SF and NYC apartments at 50k per year This is tax fraud. More realistic: cell phone bills, car expenses and home internet.
Not really. There are tons of gray areas:
1. First, it's perfectly legal for an employer to pay for housing, but it may be counted as income to an employee. It depends: https://www.corporatehousing.com/blog/corporate-housing-tax-...
2. The IRS also allows deductions for a home office. The rules about this are pretty strict, but again, there are gray areas here about what counts as an office.
Re: I surveyed 500 startup founders about their salaries
#28Re: I surveyed 500 startup founders about their salaries
#29I think what people often blissfully miss about founder comp is that the business literally supports the founder's entire life. Everything is a business expense. Pay yourself 50k as a little bonus and run almost everything through the business, because if you don't survive, neither does the business. You think founders are paying out of pocket for their fancy SF and NYC apartments at 50k per year living humbly? Think…
> think founders are paying out of pocket for their fancy SF and NYC apartments at 50k per year This is tax fraud. More realistic: cell phone bills, car expenses and home internet.
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Re: I surveyed 500 startup founders about their salaries
#30There's an interesting blip at the end of the chart "Bootstrapped vs. VC-Backed Salaries Breakdown".
Salary Range Bootstrapped VC-Backed
-------------- ----------- --------------
200k-249k 3% 6%
250k-299k 1% 3%
300k+ 6% 2%
That's also where you get into that bump at the end. If my bootstrapped company is earning 10M/yr, you bet I'm taking 1M+ salary guilt-free.
edit: accidentally swapped the headers on first post