We first kicked off the Founder Salary Report in 2021 to help answer a common question — "how much should I be paying myself?" Investors have good aggregate stats about this, but founders don’t, which leads to asymmetry… until now.
Every year, I’ve also created a special YC-specific edition of this report. Last year, 200+ YC founders participated, and a whopping 1,500+ YC founders downloaded the report.
One year later, I'm thrilled to have run this survey for the YC community again, bringing you even more data and highlighting interesting differences between 2022 and 2023.
Huge thank you to the 330+ YC founders who joined in on this year’s survey. I know you'll not only enjoy this report, and also find it super useful as you discuss compensation with your co-founders and investors.
Gillian O’Brien
Founder in Residence @ Pilot
P.S. This survey was exclusively distributed on Bookface. While I encourage sharing this data with fellow YC founders, please don’t share it outside the YC community. 😊
For founders who take a salary, both median and average (mean) salaries increased when compared to 2022, 22% and 38% respectively. The biggest change from 2022 was the incidence of founders who are taking no salary at all, nearly doubling from 2% of respondents in 2022 to almost 4% in 2023.
Average funding amounts increased +107% to $16.8M (excluding one outlier of $1.1BN) up from $8.1M in 2022, while median fundraising amounts increased only 20% to $3M up from $2.5M last year.
As expected, funding amounts and total FTEs are larger for later cohorts than more recent cohorts. There was a surprising amount of variation in salaries, however — S20 and S21 founders have the second lowest salaries of all the batches.
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, answers overall skewed between $100K and $5M in funding, with nearly 60% falling into this range.
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 56% of respondents employing 10 people or fewer and just 18% of respondents employing more than 25 FTEs. We used the number of FTEs to approximate both size and sophistication. 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.
More than 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.
I hope this report gives you a good sense of what other YC founders are doing for salaries, and that it serves as a useful guide in discussing founder compensation with your cofounders and investors.
I’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.
Thanks again, YC founders, for helping me put this together and allowing me to share it with you!
