How to decide your salary as a Founder?
We got suggestions from 20+ Founders of 1000 Founders Community and planned to share with founders so that they can decide their salaries thoughtfully...
Making the decision to decide a founder’s salary is one of the more difficult tasks that founders face when building their startup. While this decision requires buy-in from investors and partners, it takes notable courage to reveal the founder’s worth, what they can realistically sacrifice, and how much they are worth to the company.
Here are the opinions from our Founders from 1000 Founders Community when they were asked about the Founder’s Salary
“Salary caps were placed earlier. Over the last 3-4 years, rarely have heard VC capping the founders salary. Founders they themself take cognisance of how much they should take home” - Founder, 1000 Founders Community
Founder’s Salary Framework by Karan Bajaj
Another founder from 1000 Founder’s Community has a framework of part fixed and part performance based Salary for Founders…
“Early stage no revenue:
With 1mm/Arr Revenue: 15-25 Lakhs + Milestones
2-5mm/Arr: Lakhs. 25-50 Lakhs + Milestones
Factors that drive :
your % equity
your involvement
your role
your expertise to drive growth
your overall rating as founder
markets
“We are at an early stage with no product yet, no revenue obviously, we have got salary 60 lakhs annually between 4 co founders. I feel it comes down to how you negotiate with your investors, my two cents.” -- Super Founder, 1000 Founders Community
“Also, based on the investor, I got 2 Lakhs on 3.5M valuation and stage” -- Founder, 1000 Founders Community
“We don’t withdraw salaries until we hit 1m/arr, we are able to do that because we run other portfolios. But after hitting 1m/arr we draw some as mentioned above and that’s mentioned in our Projections when raising funds” -- 1000 Founders Community
“I would personally suggest drawing salaries even then. maybe it can be put back into the company. That enables eligibility of founders to take personal loans as and when required too.” -- Pro Founder, 1000 Founders Community
We hope that these suggestions from our founders of 1000 Founders Community will help you streamline and take the right decision.
If you are a founder looking to join a community, that will help you get to $10 million in revenue, without funding, please join here 1000founders.in
My personal experience with this was to draw enough so I don't have to worry about basic living expenses, and can give the attention the startup deserves.