1. Are you cash flow positive? 2. Growing very rapidly? 3. Needing to hire and manage staff to service fast growth? Unless you can say yes to these questions

1. Are you cash flow positive? 2. Growing very rapidly? 3. Needing to hire and manage staff to service fast growth? Unless you can say yes to these questions I don't think you need a CEO. You may need a business development person if you are selling to enterprises or you may need a great digital marketer if it is a consumer play. Or you may need 1 or 2 customer support people but it is highly unlikely that at this stage, taking in $250K in funding, that your start-up needs a CEO. I assume that you and the other product partner are the ones who have the vision and made the early sacrifices. If you bring someone in at this stage as CEO with that kind of salary it sounds like you are abdicating the visionary founder role. Why not use some of that money to bring yourself on full-time so your focus is not split between your day job and this start-up? One possible caveat to my advice. If this prospective CEO is willing and able to take on the front-line sales, service and support roles and actually do the work personally for awhile at a salary similar to the 40K that the product partner is willing to take then it might be a great addition to the team. Give a little larger equity slice but conserve your cash.