We launched the first Founder Salary Report in 2021 to answer a common question from our clients: how much should I be paying myself? Investors have good aggregate data about this, but founders don’t… until now.
This report will give you a sense of what your peers are doing, along with key differences from 2022, and what the trends are for companies like yours. We know you’ll enjoy this report and we hope it’s a useful guide in discussing founder compensation with your co-founders and your board.
A big thank you to the nearly 750 startup founders that participated in this survey—this is a unique snapshot of real-world data from across the globe.
For founders who take a salary, both median and average (mean) salaries increased when compared to 2022, 15% and 6% respectively. The biggest change from 2022 was the incidence of founders who are taking no salary at all, up 30% from 5.5% of respondents in 2022 to 7% in 2023.
Average funding amounts increased +48% to $12M (excluding one outlier of $1.1BN), up from $8.1M in 2022. It's a similar story to the trends we saw in overall salaries. While the average fundraising amount has increased YoY for those that have raised, the incidence of founders bootstrapping their startups has increased +180% from 4.5% of respondents in 2022 compared to 11.5% in 2023.
This section looks at how much founders are paying themselves, relative to the amount of funding that their company has raised. While our responses came from a wide spectrum of funding amounts, most respondents had raised $250K and $5M in funding, with nearly 65% falling into this range.
Founders who are VC-backed are more likely to have higher salaries compared to their bootstrapped counterparts. Of the founders who paid themselves between $100K and $200K annually, 93% of them were VC-backed while only 4% were bootstrapped.
Nearly 70% of bootstrapped founders pay themselves between $1-$100K annually, while 54% of VC-backed founders pay themselves between $50K and $150K a year.
Bootstrapped companies were defined as those with no funding, while VC-backed salaries are defined as those with some investor capital.
This section looks at how much founders are paying themselves, relative to the number of full-time employees (FTEs) at their company.
Our results here skewed toward smaller companies, with 40% of respondents employing 5 people or fewer and just 16% of respondents employing more than 25 FTEs. We used the number of FTEs to approximate both size and complexity. As businesses grow, their needs become more complex, and their employee count tends to grow as well.
Here we look at how much founders are paying themselves in specific locations. By examining salaries in the context of their geography, we attempt to control for cost-of-living differences that might distort the overall averages.
50% of responses were reported being based in either New York or the San Francisco Bay Area. We list these locations specifically below.
Geography plays a major role in a startup's overall finances and salaries. In this section, we'll provide further context by looking at funding and company sizes that are remote, or within the SF Bay and NYC areas.
For this report, we are only providing deep dives for these three geographies. In future reports, we hope to gather more robust data from other areas, and offer deep-dive analysis for more regional markets.
We hope this report gives you a good sense of what other founders are doing for salaries, and we hope that it serves as a useful guide in discussing founder compensation with your cofounders and your investors.
We’d like to end with a little bit of a philosophical note: there’s no magic number for what you as a founder should pay yourself. Market comps of course matter, but ultimately the question is a highly personal one: what salary is needed to allow you to focus your efforts on making the business successful?
In particular: if your salary is too low, you’ll spend a bunch of time and energy stressing out how to make your rent payment or how to cover your childcare costs—and all that stress distracts you from making your business successful.
So in short, the correct amount to pay yourself (company funds permitting) is not a specific dollar amount: it’s enough so that you can focus all of your energy on creating a successful company.
We’re wishing you the best of luck with your business!
