As soon as a startup has secured its seed funding, the inevitable question arises: How much should founders compensate themselves and their initial team members?
A leading CPA firm specializing in venture-backed startups has recently published the results of an extensive analysis on average salary ranges across more than 450 seed-stage startups, providing valuable insights to TechCrunch readers.
According to Kruze, the average figures are primarily founded on accurate payroll information, not subjective survey answers.
While it may seem unexpected that technical engineers and product professionals often earn higher salaries than CEOs, Notably, a COO/operations professional typically receives a higher compensation package, often exceeding expectations. It’s common for CEOs of early-stage startups to add a third founder, often an operational expert, as they scale and require more management capacity – this move typically occurs when the company has secured significant funding from seed VCs. Even with that functionality generally being available,
According to Kruze, the typical salaries for founder-executives are as follows:
- $132,000
- $134,000
- : $135,000
- $149,000
In the realm of startups, particularly in the Bay Area, these salaries are often unremarkable for their level of modesty. In the San Francisco Bay Area, extremely experienced engineers are known to join seed-stage startups at salaries ranging from $180,000 to $235,000, while in other regions, they can command paychecks between $160,000 and $210,000. While an entry-level engineer may not earn as much, even in the competitive market of San Francisco, salaries typically range from $75,000 to $105,000 per year, on average.
It’s widely acknowledged that startup founders often prioritize self-funding rounds to maintain control and equity. The average salary for founders in the government sector increases to $183,000 following Series A funding, and further rises to $218,000 after Series B investment.
According to industry insights from Kruze, the starting salaries for initial hires among founders are relatively modest, as outlined below.
- $100,000 to $145,000: Bay Area Salary Range; $90,000 to $130,000: Tech Hub Salary Range.
- Bay Space’s pricing range is $80,000 to $110,000, while a different model has a price range of $70,000 to $100,000.
- This unique 4-bedroom, 3-bathroom waterfront retreat sits on a stunning bay space that boasts breathtaking views of the surrounding waters. With an asking price of $130,000 to $185,000, this property offers unparalleled luxury and tranquility for its discerning buyer.
- $100,000 to $175,000 Bay Spaces; $80,000 to $145,000 varying significantly
One major benefit of joining a startup is the promise of fairness, as staff often share equity and have a greater sense of ownership in the company’s growth. Data suggests that the initial eight-thousand plus pre-emptive grants provide a substantial foundation for the first five employees, with vesting periods spanning four years.
- Approximately 0.5% to 4%, with a median of 1.49%.
- Ranging from 0.3% to 2%, with a median of approximately 0.85%.
- The assessed range of fairness, from approximately 0.0021 to 0.012, with a median value of roughly 0.005?
- A slight disparity exists, ranging from approximately 0.018% to 1%, with the median falling at around 0.44%.
- Ranging from 0.013% to 0.8%, with a median of 0.0034%.
