More than a decade ago I asked for $145,000 as CEO of the startup I founded. The investors didn’t balk. I would have been embarrassed to ask for more, but I bet I could have asked for more. Ryan Roberts, the Startup Lawyer, suggests that $300,000 is an unreasonable yearly salary for a CEO to request/demand. Comstudy has a report titled, “Compensation & Entrepreneurship Report in IT” that provides compensation details for startup CEOs, here are some of the interesting numbers:
- Only 33% of startups in later stage funding rounds still have their founding CEO
- By the second round founding CEOs own 18% of their company
- Average base salary for founding CEOs is $237,000
- Average total compensation for founding CEOs is $286,000
- Average total comp for non-founding CEOs is $339,000
- Average ownership for non-founding CEOs is 5.46%
Given that the average startup CEO salary is between $286,000 and $339,000 I am not sure $300,000 was that unreasonable.
These seem like pretty high figures for the new generation of low-cost startups. If raising millions in VC it makes more sense, but what about companies that are raising just a few hundred k? You don’t want one founders salary to eat the whole investment the first year right?