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This is pretty damn spot on. My company raised $700k, and just hired the fourth person for our four-person team. I've had a lot of people ask me about how our e

This is pretty damn spot on. My company raised $700k, and just hired the fourth person for our four-person team. I've had a lot of people ask me about how our expenses work out, so I figure I'll be a little bit transparent in hopes of helping newer folks out. Person 1: Business/operations/marketing/CEO stuff (but still likes to get hands dirty in code when possible). 60k/yr, lots of stock. Person 2: Brilliant programmer, mostly back-end. 115k/yr, lots of stock (family + student loans). Person 3: Good programmer, mostly front-end. 120k/yr, a little stock. Person 4: Great designer/product/UX. Can write HTML/CSS/JS, but it's usually faster for him to pass it off to #3. $100k/yr, a little stock. The salaries are, of course, dependent on our needs and personal circumstances. The person who makes 60k has practically no expenses, at least relative to some of the other members of the team. We're also distributed geographically, so the salaries will change slightly in SF vs. middle-of-nowhere, but that's the gist of what I consider the classic team. After taxes, office space, etc. Our burn will last us just more than 18 months (we're frugal on this stuff - didn't need new computers or many monitors or other stuff). We also spend about $500/month on various types of software. If something slows us down even a couple days, it's cheaper for us to buy a software solution than to pay salaries while everyone works through it manually. Everyone has to be a generalist to a certain extent, but we all naturally gravitate to what we're good at. It took us a long time to hire person #3 - we thought we would be able to get away without him/her, but adding him/her feels like it's doubled the rate at which we can ship product. We formerly compensated for it by having #1 and #4 do his job, and that really slowed things down. Now we have every opportunity to do what we need to do. It's all up to us. Hope that is helpful to someone.

loceng 12y ago
Mind sharing where you were at (product wise) prior to the $700k raise?
- austenallred 12y ago
  Launched for one month, 50k "users" and 250k page views in the first month. Users is in quotes because we only required a username to sign up, so it was pretty close to measuring active unique visitors. But most importantly we had a really compelling story and go to market strategy in a really big market. Over 50% off the investors we talked to invested, which is absurd, so don't feel like that's the minimum either.
  - adambenayoun 12y ago
    I love it when founders will only take what they need and not automatically adjust their salaries to each other even when their life circumstances are different.
felixgassner 12y ago
thanks for sharing - is what you're paying them on the high-end? just wondering if that's standard pay. thanks!
jasonmcalacanis 12y ago
Stoked to see we are in sync... the data I put together is based on a couple of dozen investments in this stage. Some folks do it cheaper, some folks spend more money.
saurabhnanda 12y ago
Is the person getting a lower salary for personal reasons being compensated with higher stock? Or is everyone being altruistic about it -- "I won't drain cash if I don't need it"?
- austenallred 12y ago
  The purpose of our salaries is to keep us alive while we build a great company; what arbitrary number of dollars is required to do that isn't important to me. We have an equal number of shares, because he's an equal partner. If I take an extra 20k of salary, that's 20k less we can use to hire someone better/smarter. I'd much rather work with smarter people than drive a nicer car. I don't really care for "stuff" anyway. If you offered to let me stay at this level for the rest of my life and promised I'd always be able to work on something I believed in, I'd take that deal in a heartbeat, even if it's far below market. http://austenallred.com/everything-you-need/ http://austenallred.com/everything-you-need/
  - deleted 12y ago
    [deleted]
pbreit 12y ago
First, cool of you to talk about your situation. My 2 cents: salaries seem high even if all in SF. I think it's reasonable to go with reduced salaries at seed stage. If there's concern, include full salaries in offer pending fundraising/revenue. Cash is extremely valuable. The first few people need to bear down. As you say, they're working for the challenge and the promise, not the money.
- deleted 12y ago
  [deleted]

loceng 12y ago

Mind sharing where you were at (product wise) prior to the $700k raise?

austenallred 12y ago
Launched for one month, 50k "users" and 250k page views in the first month. Users is in quotes because we only required a username to sign up, so it was pretty close to measuring active unique visitors. But most importantly we had a really compelling story and go to market strategy in a really big market. Over 50% off the investors we talked to invested, which is absurd, so don't feel like that's the minimum either.
- adambenayoun 12y ago
  I love it when founders will only take what they need and not automatically adjust their salaries to each other even when their life circumstances are different.

felixgassner 12y ago

thanks for sharing - is what you're paying them on the high-end? just wondering if that's standard pay. thanks!

jasonmcalacanis 12y ago

Stoked to see we are in sync... the data I put together is based on a couple of dozen investments in this stage. Some folks do it cheaper, some folks spend more money.

saurabhnanda 12y ago

Is the person getting a lower salary for personal reasons being compensated with higher stock? Or is everyone being altruistic about it -- "I won't drain cash if I don't need it"?

austenallred 12y ago
The purpose of our salaries is to keep us alive while we build a great company; what arbitrary number of dollars is required to do that isn't important to me. We have an equal number of shares, because he's an equal partner. If I take an extra 20k of salary, that's 20k less we can use to hire someone better/smarter. I'd much rather work with smarter people than drive a nicer car. I don't really care for "stuff" anyway. If you offered to let me stay at this level for the rest of my life and promised I'd always be able to work on something I believed in, I'd take that deal in a heartbeat, even if it's far below market. http://austenallred.com/everything-you-need/ http://austenallred.com/everything-you-need/
- deleted 12y ago
  [deleted]

pbreit 12y ago

First, cool of you to talk about your situation. My 2 cents: salaries seem high even if all in SF. I think it's reasonable to go with reduced salaries at seed stage. If there's concern, include full salaries in offer pending fundraising/revenue. Cash is extremely valuable. The first few people need to bear down. As you say, they're working for the challenge and the promise, not the money.

deleted 12y ago
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