Seeing founders pay themselves exorbitantly was not a great sign, though. If someone is truly building a company into something they believe to be very valuable, the salary shouldn’t matter very much beyond helping them not worry about bills while they grow the company.
That’s all kind of obvious and well known. What I didn’t know was how the unscrupulous founders also know this very well and instead come up with creative ways to pay themselves outside of salary numbers. One founder liked to pay himself $100,000 consulting fees after fundraises to “reimburse” his work done before the raise at what he believed to be “below market rate”. It’s the kind of thing that won’t show up on cursory due diligence, but will poison later rounds when investors dig into finances and realize the CEO or other cofounders have been quietly extracting extra money for themselves. In one case it damaged a startup I was fond of enough that it cost the CEO potentially millions in equity in a later acquisition that failed.