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Does/should a founder’s skills and market-rate salary affect their salary in the startup? For example, if a highly sought-after AI expert founds a startup with

Does/should a founder’s skills and market-rate salary affect their salary in the startup? For example, if a highly sought-after AI expert founds a startup with a talented but somewhat junior businessperson, their market-rate salaries could be 2-5 times different and a case could be made that the one with higher market-rate salary makes a larger sacrifice/take on more risks and thus should be compensated more?

rbcgerard 9y ago
Yes - or their equity ownership
Geekette 9y ago
No, it shouldn't. If both senior and junior are starting the company at zero and working fulltime/equally pouring sweat equity in and assuming similar living expense profiles, then they should be compensated similarly. If you can't see your cofounder as equal, then partner with someone else. Or if the salary differential is that important to you, then remain on the corporate path.
- deleted 9y ago
  [deleted]
- nopinsight 9y ago
  What if the junior partner is the best person available with history of good working relationships with the senior cofounder? Not considering him/her because of salary differential might be suboptimal for the startup. At the same time, the senior cofounder could have a much larger need for salary because of mortgage and family to take care of, so receiving too little salary would cause hardship and adversely affect the startup, while the junior person has less financial obligations.
bwilliams18 9y ago
And that should be reflected in the equity split, not in comp.
Spooky23 9y ago
If the “junior businessperson” isn’t worthy, why is he a partner?
- nopinsight 9y ago
  Their talent could be a good match and the AI expert might have a good working relationship with them for a long time (thus reduced risks of future conflicts). Given the many constraints on having a great co-founder, market rate salary difference might not be the criterion to cut one out of the candidate pool.
mbesto 9y ago
> Does/should a founder’s skills and market-rate salary affect their salary in the startup? Yes, yes it should and it regularly does. Jantz's suggestions are just that - suggestions. As he says himself: > However, our data set is quite limited and the numbers produced by the calculator should by no means be taken as the ultimate truth. As with all of VC's publicly available content - don't treat it as dogma. It's a guideline and think for yourself.
taneq 9y ago
In your example the ownership wouldn't be 50/50, and in fact should probably approximate the ratio of salaries expected.

rbcgerard 9y ago

Yes - or their equity ownership

Geekette 9y ago

No, it shouldn't. If both senior and junior are starting the company at zero and working fulltime/equally pouring sweat equity in and assuming similar living expense profiles, then they should be compensated similarly. If you can't see your cofounder as equal, then partner with someone else. Or if the salary differential is that important to you, then remain on the corporate path.

deleted 9y ago
[deleted]
nopinsight 9y ago
What if the junior partner is the best person available with history of good working relationships with the senior cofounder? Not considering him/her because of salary differential might be suboptimal for the startup. At the same time, the senior cofounder could have a much larger need for salary because of mortgage and family to take care of, so receiving too little salary would cause hardship and adversely affect the startup, while the junior person has less financial obligations.

bwilliams18 9y ago

And that should be reflected in the equity split, not in comp.

Spooky23 9y ago

If the “junior businessperson” isn’t worthy, why is he a partner?

nopinsight 9y ago
Their talent could be a good match and the AI expert might have a good working relationship with them for a long time (thus reduced risks of future conflicts). Given the many constraints on having a great co-founder, market rate salary difference might not be the criterion to cut one out of the candidate pool.

mbesto 9y ago

> Does/should a founder’s skills and market-rate salary affect their salary in the startup? Yes, yes it should and it regularly does. Jantz's suggestions are just that - suggestions. As he says himself: > However, our data set is quite limited and the numbers produced by the calculator should by no means be taken as the ultimate truth. As with all of VC's publicly available content - don't treat it as dogma. It's a guideline and think for yourself.

taneq 9y ago

In your example the ownership wouldn't be 50/50, and in fact should probably approximate the ratio of salaries expected.