Hacker News Reader

Comment by webwright | Hacker News Reader

How much income would you need? Even with a smallish Series A, you're generally expected to have a pretty crappy salary.

It's kind of sad that startups are a game for people who have a long personal runway (combination of savings and cheap lifestyle, usually), but that's the reality.

No investor is going to be excited to see their money put to work by paying down student loan bills, though at a certain level you can often swing a 50-70k salary. As I understand it, get big revenue or a big Series B round, and you can generally lobby successfully for a non-insulting salary.

View on HN

Investors will question your judgement if you pay yourself more than 50-70k? That's surprising.

I think these numbers are a little on the low end these days, if you've raised at least a respectable series A.

Yaw, I did say "smallish" series A. If you're raising 4-6m, then founder salary really ceases to be a big needle mover in terms of runway. Certainly angel investors will often push hard on founder.

If you have less than a million in the bank, I think the question needs to be framed as "How much do I need to survive" and NOT "What did I make at my last job". If the founders aren't trying to dig deep here, then I'd wonder about their motivations (unless revenue was taking off). Lack of runway kills startups.

I don't think this is entirely correct. Good investors understand that different founders have different situations. If you're 19 years old and your personal expenses are negligible, and you pay yourself $90K, investors will wonder if you're committed to your startup. But if you're leaving a $150K job and have a family, and you pay yourself $90K, your investors won't mind. Or else they shouldn't be investing in you in the first place.

It totally depends on how much you raise, who your investors are, who YOU are, etc.

But your salary needs are a reflection of your commitment. i.e. if 3 founders raise $500k, $50k salaries give them a ~15k/month burn rate fully loaded, approximately. $100k salaries give them a $30k/month burn rate fully loaded. The difference is the ability to hire two solid ppl.

Which do you choose? Is your lifestyle more important than 2 hires? Alternatively, if you don't need to hire any more, how much runway do you shave by making $100k across 3 founders?

Investors also want interests to be aligned. Low pay early on means that you're motivated every day for growth (because revenue or a larger investment round means a raise). They'd certainly rather see their money invested in growth than in founder lifestyles.

Of course, every situation/investor/founder is different... But yeah, expect to take a big pay cut.

I don't agree with this. Most startups I've worked for paid better than that. Especially after series A. The investors know you have to pay for talent.

There are no IPOs these days so at a typical .5-1% the best outcome for a hired engineer is for the company to get acquired in < 2 years, make about $300K and get a job at the acquiring company that pays 2x they would make if they just went to work there in the first place. Kids who go to Stanford and MIT seem to have this figured out and are expecting to be paid market rates. Your market rate may vary.

The worst places I've worked are the ones where the founders conned all the staff into working for $50-$70K by using extremely optimistic outcomes for demonstrating how much their options might be worth in the future. Which is like 70% of all startups in Silicon Valley.

Reply on news.ycombinator.com