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Ask HN: How to ask for a raise at a startup?
Dear HN,
I work for a small (<25 people) but profitable software shop in the US that has been around for a few years. The company has seen very steady growth in terms of revenue (double digit percentages) over the past few years. I have been here for about a year and a half (my second job after graduating from the university) and now feel that it is time to ask for a raise. I think so because I have delivered a number of really large projects for the company and am the "go to" guy for a lot of architecture and software design questions.
My question is how do I ask for a salary raise? Sites like salary.com seem to contain a lot of information about larger or more established businesses which might throw off my numbers. What kind of a percentage bump can you typically expect out of a raise at a profitable startup? Are there any techniques beyond "show your achievements and show that you deserve a raise in the current market" that I could use in the negotiations?
Thanks in advance.
- ryanpetrich 15y agoThe same way you would when employed by any other type of business.
- quandrous 15y agoThere are certainly similarities, but I feel that with a startup there are some different expectations. For example since I get (a small amount of) stock options, and it is a small company it would not have a large amount of cash stored in the bank the counterargument to me asking for a raise might just be "we are already paying you enough and we cannot afford any more". The other distinction is that we have no dedicated HR staff so I'll be negotiating directly with the CFO.
- div 15y agoSince you are probably not privy to your employers actual financials, there is no point speculating. Just go ahead and ask. If they tell you there's no money, or that they think they're already paying you enough, try to negotiate a re-evaluation in 3 to 6 months. Decide for yourself if you can live with not getting a raise. Negotiating directly with the CFO beats negotiating with him through an HR person.
- revorad 15y agoRead patio11's past comments. He generally has very good advice on this issue.
- quandrous 15y agoThanks, I will.
- bigohms 15y agoAsk like an adult, without confrontation. Don't show achievements, demonstrate value. Request that compensation be in line with your contributions. While you're at it, relate to the corporate goals and your potential impact in future opportunities at the company. Know what double digit is. It costs a lot to run a 25 person operation, double digit can be 10% (barely close to inflation-bad) or 30%+(good). Understand that most successful businesses, unless they are planning for a large acquisition, increasing cash reserves in light of major market movement, or the like, will budget a reserve for cost-of-living increases to salary. This amount is almost always arbitrarily given to high achievers or out-of-line comp, with the rest thrown back into general fund for unplanned capex. Understand that you have the option of bringing up that you have personal goals (housing, greater education, financial responsibilities, personal growth) outside of work that you can use the extra resources towards. This shows initiative to grow and not just a move to make a point (remember: confrontation is not always a good move).
- quandrous 15y agoThanks for the detailed response. The company is definitely in the "good" portion of the spectrum: past couple of years were actually 50%+. I am not sure I understand the distinction you are making between achievements and value. How does one go about demonstrating value without showing past performance? So far my pitch is based on "I have revamped some core systems and processes so that we are a much better company for it and I have become integral to key architecture decisions." listing specific projects that I worked on. Is that not a good approach?
- byoung2 15y agoI am not sure I understand the distinction you are making between achievements and value. I think he means instead of saying "I delivered X project" or "I am the go to guy for architectural questions" you would say "X project which I delivered now earns the company $Y million" or "my expertise at X system saves the company $Y dollars in support contracts". You want them to see that the money you save or earn the company is worth more than the raise you are requesting.
- kayhi 15y agoCan you relate your work to the double digit growth? The percentage of bump and your current role in the company may have a set limit. Analogy: don't hire surgeons to paint a room cause they charge 200/hr when there are people who will do a good job for 20/hr. If you are doing a 20/hr job then that it's the market price. Is your job or responsibility increasing in value? If you started off filing paperwork and have now moved into making sales calls then your value has increased. If you are helping the company more then an increase in salary would make sense. Job offers from another company can also be helpful leverage.
- quandrous 15y agoUnfortunately not directly. I am a software developer, and there is not an obvious correlation between "a piece of software is deployed" and "we just got a new client". It is a B2B venture so the total number of clients is pretty small, but each client is very profitable. However, I don't participate in sales or networking.