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What Are The 5 Rules You Should Follow To Determine Your Startup Team’s Salaries?
“Sounds a little rich to me,” one of my investors, “Raul”, said to me when he asked me what I was going to pay myself as CEO. We had just closed $12M in Series A funding, and the salary I suggested paying myself was the median for a Series A CEO in our industry with that level of funding.
No, it wasn’t anywhere near $1M per year. And no I didn’t adjust my salary because of Raul’s protests. The truth is I could have told Raul a ridiculously low number and he would have said that was too high. That was just the way Raul was wired.
The reality is you’re on your own when it comes to determining what salaries you should pay yourself and your team. Here are five basic rules you should follow when you’re thinking about salaries for you and your team:
Rule Number 1 For Startup Salaries: You want your funding to last at least 18 months.
Why is 18 months the minimum you want your funding to last is really simple. If your funding only lasts 12 months or less, then you will be in constant fundraising mode.
Worse yet, you might not accomplish enough if your funding dries up too soon to justify more investment. That’s why, as a rule of thumb, you want you funding…
