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I surveyed 500 startup founders about their salaries

• darkwizard42 4y ago
  Thought the site was designed very beautifully. I'm not 100% sure I have too much comment on the salaries, but kudos on putting together some engaging content!!
  • sonofaragorn 4y ago
    I was going to say this, beautiful data viz! OP can you talk a bit about what tools were used?
    • gillianobrien 4y ago
      it's all Webflow native :)
• yrgulation 4y ago
  Now do dividends and other perks.
  • ghiculescu 4y ago
    In a young startup, that’s easy: no dividends and no perks.
    • yrgulation 4y ago
      Would be nice to have data available on this.
      • scient 4y ago
        If the company is not public, there are no dividends. Crazy that stuff like this needs to be explained on a tech site.
        • yrgulation 4y ago
          I am pretty sure in europe there are. Crazy that stuff like diversity among countries has to be explained on a tech site.
          • earth_walker 4y ago
            Here in Canada private companies can and do pay dividends to their shareholders.
            • yrgulation 4y ago
              Well exactly.
              • ghiculescu 4y ago
                All of this depends on the company being profitable, which young startups typically aren't and probably shouldn't be.
                • yrgulation 4y ago
                  I know, but having data on it helps. I am curious how many of these funded companies actually generate profits for their founders and how soon. It may be that despite large investments returns are slim, meaning many such startups are a waste of time.
        • dcow 4y ago
          This is not strictly true. A company can pay dividends if it's profitable at any point in time. Whether it's publicly traded doesn't matter. Whether it's a good idea or not is another question.
  • j0hnyl 4y ago
    These are small companies so I don't think that's as relevant.
• dcow 4y ago
  I 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 again. IDK, I always thought this part of the narrative was rather misleading. EDIT: I'm not a tax person, obviously people aren't being illegal and dishonest. It's just smart to write off everything possible in a founder's life as a business expense. Maybe housing or this or that doesn't qualify where you live? Great that's what the minimal salary is for. Everything else goes on the company card. 2nd EDIT: I don't really understand why everyone is so cagey whenever this topic comes up. This isn't news. The IRS isn't reading this saying "gosh darn they figured out a new loophole". The laws are clearly spelled out, it's up to you to apply them to your situation. Remember, tax evasion is illegal. But minimizing tax liability is 100% okay and literally the name of the game. Otherwise, we wouldn't have tax breaks in the first place.
  • mousetree 4y ago
    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.
    • dcow 4y ago
      The tax-conscious kind.
    • whoknew1122 4y ago
      Every startup I've worked in.
    • ericghildyal 4y ago
      Agree completely here! When we were getting everything up and running, we were making decisions about which SaaS platforms were worth our money. Having the company pay for something personally never once crossed my mind.
    • 4y ago
• dQw4w9WgXcQ 4y ago
  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
  • rdli 4y ago
    You'd need board approval.
• ghiculescu 4y ago
  I think this study should ask founders their age. It has a huge impact, probably more than any factor they did ask. I started my first startup at 20. We were bootstrapped, so we started at $0 salaries, and didn’t pay ourselves more than 1k/month for a few years. We all lived together somewhere cheap to keep rent low. Now I have a family and stuff… it would be very hard to go back to living like that. So the range of salary options practically available to me is totally different, regardless of where (in the US) I live, how much I raise, etc.
  • gillianobrien 4y ago
    Great suggestion! I think we'll ask this question in the next iteration :)
    • jsonne 4y ago
      Yeah actually beyond age I would also break out "Do you have children" explicitly as that changes that calculus a lot.
      • toomuchtodo 4y ago
        Additional potential questions: Does your spouse or coparent have an income? Do you have a mortgage and what is the monthly amount? Do you support an elderly parent?
        • Ancapistani 4y ago
          Agreed. I’m married with two children, and my spouse effectively[1] doesn’t earn an income. I’d consider running a startup, but my life situation requires that I have a reasonably steady annual income of ~$125k. That doesn’t mean I have a lower risk tolerance, or at least not exactly. It means I have a higher risk floor that I had fifteen years ago. [1]: they have a small business that I’d reasonably say is their life’s work. Because of my income they don’t have to make it a steadily profitable business and can therefore reinvest the profit it produces. It’s a business serving children and is parts of the burgeoning local arts community. It’s very helpful to be able to waive fees and offer small scholarships for children in our area, where the median family annual income is <$30k. It’s also been a blessing to be able to hire teenage students from time to time; more than once that’s turned an extracurricular activity that the kid is passionate about from a cost to a small source of income for a family of very limited means./
• kleiba 4y ago
  Salaries by Geography - it's a shame that this is US-centric, I would be very curious about the median/average salaries of European founders.
  • gillianobrien 4y ago
    Yes - I'm optimistic that in the next iteration we can get even more data points, so that we can do some of these additional country breakouts!
• lifeisstillgood 4y ago
  I 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?
• tobyjsullivan 4y ago
  There'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% Overall, I see a pattern that could be explained by slightly different perspectives. A VC-backed founder likely sees themselves working for someone else - "My work will benefit the investors, so I will get paid for that work." Whereas the bootstrapper is very obviously working for themself - "I'll take what I've earned or need and no more". 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
  • paxys 4y ago
    Simpler explanation – salaries of VC-backed founders have to be approved by the board, which consists of these same VCs. Bootstrapped founders can pay themselves whatever they want.
  • Swizec 4y ago
    > If my bootstrapped company is earning 10M/yr, you bet I'm taking 1M+ salary guilt-free. Wouldn’t you prefer to take minimum salary and the rest as dividends? Seems like that would be the more tax advantaged approach and fully within your ability to do as majority owner.
    • pclmulqdq 4y ago
      Once your company is earning $10M/year, you should probably be using debt instruments instead, and paying yourself enough salary to cover the interest. That gives you a real tax rate on your cash earnings under 10% (and capped at the LTCG rate) if you can get a decent valuation.
      • JumpCrisscross 4y ago
        > gives you a real tax rate on your cash earnings under 10% And turns your start-up failing (or firing you) into a financial end game.
• CommanderHux 4y ago
  Am I missing something or does there seem to be data mismatch? Breakdown of Salaries by Geography -> NYC Area -> Highest Salary 300K Breakdown of Salaries by Funding Level* -> $5M-$9.9M -> Highest Salary 400K for NYC
• pageandrew 4y ago
  Do founders set their own salaries? Do they need to be approved by a board/VCs? Do investors have heuristics to help decide if a given founder's salary is appropriate, and not exploitative to boost a founder's lifestyle before a business is truly viable?
  • IshKebab 4y ago
    Yeah they have to be approved by the board.
• bogota 4y ago
  Nice, someone with a company size of 26 to 50 got 50M of funding and is paying themselves out 1M a year working remote. That is the life. I want to know what industry that is in.
• aerosmile 4y ago
  There are other sources of this exact same info, and this source is far more on the lean side then anything I’ve ever seen. It’s not something I can share because the subscription is not mine, but I am sure others can back me up on this.
• j0hnyl 4y ago
  Looks like nearly half of the founders surveyed are running companies with 5 or less employees. I wonder if this skews the average way down for the whole sample set. For example, if you look at the salaries reported by founders of companies with teams >25 the average salary is much higher.
• noobermin 4y ago
  As a non-start-up person who'd really not likely ever do it but looks at graphs all day as a job, it does seem like the long tail makes sense, although it's hard to tell if 500 (plus a survey) is a representative sample. It seems like the usual thing for power distributions, you'll have a long tail with flying high salaries which is what most people think of when they think of founders (the architype of a walking hype and reality-disortion field emitting white man wearing a poloshirt), but you'll have a nice chunk near the bottom of the distribution which is "everyone else" who likely won't make a big exit. Don't the vast majority of start-ups fail? That description is the quintessential description of "success" for any variable with a power-law distribution.
• gen220 4y ago
  Super cool survey! And interesting results. Does anyone know if it shares how the answers were solicited? Every survey of this size has substantial sampling bias (which doesn't invalidate the result, just helps us to more rationally interpret it). --- [edit] there's some color at the bottom, though I'm still curious to know more. > The 2022 Founder Salary Survey was conducted over a five-week period starting in May 2022, during which we reached out to founders through our extended networks and elsewhere online. > We received a total of 516 responses. > Over 60% of our responses were from either remote Founders or Founders in the San Francisco Bay Area. Leaning on a network is a good way to scale up quickly, although it's probably the principle limiting factor on the scope of conclusions, drawn from this report. "How much do Founders, who are 0-1 degrees of separation from a company that uses Pilot, pay themselves?" is still a pretty interesting thing to read.
• vecter 4y ago
  In what world does it make sense for a founder to pay themselves $1m/year in salary? One situation I could imagine is if they have a money-printing machine and outright own the business, then that would make sense. It's hard to imagine any other scenarios where that would be reasonable.
• abeppu 4y ago
  I think maybe this data needed to be cleaned a bit more before being analyzed. For example, in the "Breakdown of Salaries by Funding Level", in the 0 - 99.9k bracket, the "average" salary is 115k and the highest is 360k. I must be missing something basic; is the salary value computed from a monthly value, and the company will either raise more or close down within a period less than a year (having paid out less than the stated salary figure)? If so, it seems a bit disingenuous.
• dang 4y ago
  This is not a valid Show HN. Please read the rules: https://news.ycombinator.com/showhn.html https://news.ycombinator.com/showhn.html. We've taken Show HN out of the title now.
  • gillianobrien 4y ago
    Ah, sorry about that! Thanks - noted for next time
• libpcap 4y ago
  Would be good to show the median.
  • corysama 4y ago
    The "Deep Dives by Geography" section has histograms.
• pc86 4y ago
  Highest salary in the $1M-2.9M funding bucket is $750k. Surely that company must be pretty profitable, I can't imagine allocating that high a percentage of your funding to the CEO salary if you're not? It's also in the 6-10 FTE bucket.
• didgetmaster 4y ago
  As a startup founder myself, I wish I had the luxury of paying myself a modest salary, but until the revenues support it that is how it goes. Even if I had a bunch of VC money, I would definitely feel guilty about paying myself a ton of money. I would still have a huge chunk of founder's stock, so I would pay myself well below market rates. If I were an outside investor in my startup, I would demand this. If a founder was living high off my dime I would be very worried that they would cut and run the moment the gravy train dried up. Startups run better when all the players have significant 'skin in the game'.
• bailster 4y ago
  Would love to see difference between “already comfortable” founders vs the rest. Comfortable ones more likely to minimize personal taxes and roll the dice on equity. Also, any breakout for startup subtypes? (SAAS, fintech, web3, health tech, AI/ML etc.)
• huangc10 4y ago
  I was at a YC startup in the mid 2010s for around 4 years. The most funding we got was a series B round but nothing more after. Near the end, I had a happy hour or dinner with one of the co-founders. He told me that if he had to choose again (giving up his engineering job vs. starting up the company), he doesn't know if he would choose the start-up route again. Just some food for thought. It's great playing the CEO or the founder and betting on yourself but at the end of the day, the financial trade-offs could be life changing (especially given the salary/stock options provided by top tech companies).
• lfranchi 4y ago
  Hi HN! I'm Leo, Pilot's Head of Engineering, and we're hiring across the board for engineers, product designers, product managers, and more. If you want to come work for a growing startup that's selling a service that every business needs (a good thing in a macroeconomic downturn!), with a wonderful, diverse team that cares about their users and each other -- I'd love to chat. Feel free to reach out :) (Hiring in SF and US-remote. Full jobs page here: https://pilot.com/jobs https://pilot.com/jobs, or feel free to email me at firstname @pilot.com. Our stack is fully typed Python 3.10 on the backend, Vue/TS on the frontend, and AWS)