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You pay yourself a reasonable living salary, based on location and living expenses. It usually has to be approved by the board, but so long as it's reasonable,
by kleinsch 16y ago
You pay yourself a reasonable living salary, based on location and living expenses. It usually has to be approved by the board, but so long as it's reasonable, you should be OK. The idea is that you're not getting rich off your salary, you should be focusing on growing the company to get rich off your ownership stake. At the same time, you shouldn't be starving, because that will cause you to spend more time focusing on your personal finances than working on the company.
- bherms 16y agoYou make a good point in your "You shouldn't be starving[...]" sentence -- One of the biggest productivity killers in my life is dealing with, or even worrying about personal finances. As a founder, if you decide you want to go get a few beers with friends and grab dinner, you shouldn't then have to worry about how you're going to recover the $30 you spent outside your budget. The key here, I think, is to pay yourself "enough to live in a manner that allows you to focus solely on your business and productivity."