Founder Salary Guide: How Much Should You Pay Yourself?
"How much should I pay myself?"
It's one of the most common—and most uncomfortable—questions founders face.
Here's the data and framework to answer it.
Founder Salary Benchmarks
By Funding Stage
| Stage | Median Salary | Range | |-------|---------------|-------| | Bootstrapped | $0 - $60K | Depends on runway | | Pre-seed | $50K - $80K | Below market | | Seed | $80K - $120K | Still below market | | Series A | $120K - $175K | Approaching market | | Series B+ | $150K - $250K | Near market |
By Location (US)
| Location | Adjustment | |----------|------------| | San Francisco | +20-30% | | New York | +15-25% | | Seattle / Boston | +10-15% | | Austin / Denver | Baseline | | Remote / Other | -10-20% |
By Role
| Role | Relative Salary | |------|-----------------| | CEO (technical) | Baseline | | CEO (business) | +10-15% | | CTO | -5-10% | | Non-technical co-founder | -10-15% |
The Investor Perspective
What VCs Expect
Most VCs want founders to:
- Be motivated by equity, not salary
- Not be financially distracted
- Demonstrate commitment through sacrifice
- Be reasonable, not greedy
The Goldilocks Zone
Too low: You're stressed about rent, can't focus on the company
Too high: Investors question your motivation and capital efficiency
Just right: You can cover living expenses without lifestyle inflation
What's "Too High"?
As a general rule, founder salary shouldn't exceed:
- 10-15% of raise at pre-seed/seed
- $150K until Series A
- $200K until Series B
Exceptions exist, but you'll need to justify them.
How to Calculate Your Salary
Step 1: Determine Minimum Needs
Calculate your actual monthly expenses:
- Rent/mortgage
- Healthcare
- Food
- Transportation
- Dependents
- Debt payments
Add 10-20% buffer. This is your floor.
Step 2: Consider Company Stage
Bootstrapped: Pay yourself what you need to survive, nothing more. Every dollar extends runway.
Pre-seed/Seed: Below market rate. You're still proving the business.
Series A: You can approach market rate, but stay 20-30% below comparable VP salaries.
Series B+: Near market rate is acceptable.
Step 3: Factor in Equity
Your total compensation is salary + equity value.
The more valuable your equity, the more salary sacrifice makes sense.
If you own:
- 30%+ → significant salary sacrifice is rational
- 10-20% → moderate sacrifice
- Less than 10% → less sacrifice makes sense
Step 4: Align with Co-founders
All founders should have similar salaries (adjusted for location/situation).
Unequal salaries cause resentment. Discuss openly and agree together.
When to Raise Your Salary
Good Reasons
✅ You raised a new round ✅ Company hit major milestones ✅ Your personal situation changed (new baby, etc.) ✅ You're burning out from financial stress ✅ Salary is significantly below your co-founders
Bad Reasons
❌ You saw what other founders make ❌ Company revenue increased (before profitability) ❌ You want a nicer apartment ❌ Arbitrary annual increase ❌ To signal success
The Conversation with Investors
Be direct:
"Given [milestone/round/situation], I'd like to increase my salary from $X to $Y. Here's my thinking..."
Support with data:
- Benchmark comparisons
- Personal financial needs
- Commitment signals (equity, time, etc.)
Most reasonable investors will agree to reasonable requests.
Salary by Company Type
Venture-Backed
Follow the stage-based benchmarks above. Investors have expectations.
Bootstrapped
Pay yourself when you can afford it. Priorities:
- Survival (keep lights on)
- Growth investment
- Emergency fund
- Founder salary
- Team raises
Profitable Startup
Once profitable, you have more flexibility. Consider:
- Paying yourself market rate
- Profit distributions vs salary (tax implications)
- Maintaining runway for bad times
Tax Considerations
Salary vs Distributions
S-Corp: Pay yourself "reasonable compensation" as salary, take rest as distributions to save on self-employment tax.
C-Corp: Salary is deductible, but creates payroll tax. Balance with equity compensation.
Deferred Compensation
Some founders defer salary during early stages, then pay themselves back later. Document this carefully.
Founder Salary FAQ
"Should founders take equal salaries?"
Usually yes. Unless there's a clear reason (one founder has much higher living costs, different time commitment), equal salaries prevent resentment.
"Can I pay myself $0?"
Yes, but:
- Make sure you can actually survive
- Document it as deferred compensation if possible
- Don't create tax issues by treating personal expenses as business expenses
"What if I have savings?"
Having savings doesn't mean you should take $0 salary. Consider taking a modest salary—it's more sustainable and avoids burning through personal runway.
"What if my co-founder wants more?"
Have the conversation early. If you can't agree, it's a red flag about the partnership. Consider:
- Cost of living differences
- Family situations
- Risk tolerance differences
"Should I raise salary after a good quarter?"
Generally no. Raise salary at funding milestones, not revenue milestones. Revenue can disappear; funding is locked in.
Case Studies
Case 1: Pre-seed Bootstrapped
Situation: Solo founder, SF-based, living expenses $5K/month, $100K saved, 12 months to build MVP.
Decision: Take $0-3K/month salary, stretch savings. Focus on getting to revenue before running out of personal runway.
Case 2: Seed Stage with Family
Situation: Two co-founders, one with family in NYC, raised $2M seed.
Decision: $100K salary for founder with family, $80K for other founder. Both below market, but accounts for different situations.
Case 3: Series A CEO
Situation: CEO with 20% equity, raised $15M Series A, team growing to 30.
Decision: $150K salary. Below market rate for CEO, but company is still pre-PMF. Equity is primary compensation.
Calculate Your Total Compensation
Use our tools:
- Equity Calculator - Value your stake
- Runway Calculator - Model salary impact on burn
- True Hourly Rate - See real compensation
Key Takeaways
- Below market is expected through Series A
- Equity is your primary upside - salary is survival
- Be equal with co-founders unless clear reasons differ
- Increase at milestones not arbitrary times
- Have the conversation - don't avoid it
- Don't create financial stress - distraction kills startups
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