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Yes, you should pay yourself. How much? Working out a pay structure is quite tricky, and reviewing it constantly so you can raise it gradually is a good way to
by ghiculescu 4y ago
Yes, you should pay yourself. How much? Working out a pay structure is quite tricky, and reviewing it constantly so you can raise it gradually is a good way to lose focus.
The approach in the article is one way, but I don't like the lumpiness of it and the big bonuses won't work if you're bootstrapped.
A better approach is to pay yourself a fixed percentage of MRR. Some VCs may add salary caps but this works until you reach that point. I’ve found that 2% works well.
I wrote this a while ago and a bunch of founders (particularly bootstrapped / tiny seed rounds) said they found it helpful in figuring out their pay structure: https://ghiculescu.substack.com/p/how-to-set-your-salary-as-a-first https://ghiculescu.substack.com/p/how-to-set-your-salary-as-...
- j0hnyl 4y agoBy your math, a person that runs a 100k MRR business wouldn't even be paying themselves enough to pay a modest rent. That doesn't seem quite right.
- ghiculescu 4y agoI agree it’s a bit extreme if you have kids. But it’s not impossible, if you want to make it work. I did it when I was 23.