When a startup raises a seed round, the eternal question arises: how much should the founders pay themselves and their first few employees?
Kruze Consulting, a CPA firm specializing in venture-backed startups, recently analyzed the average salary range of over 450 seed-stage startups and shared the data with TechCrunch.
The averages below are based on actual payroll records, not survey responses, Kruse said.
Perhaps unsurprisingly, salaries for technical engineering/product roles tend to be higher than for CEOs. What's surprising is that salaries for people with COO/Operations titles tend to be even higher on average. This is frowned upon. That's because the title Operations/COO could alert seed VCs to a third co-founder who doesn't have a clear role. There aren't that many operations to run in a small company. Even having that role can be a red flag for early-stage VCs regarding spending/budget.
Nevertheless, according to Kruse, the average salary for founder executives is:
CEO: $132,000 CTO: $134,000 COO/Operations: $135,000 Products/CPO: $149,000
These salaries are not very high, especially in the Bay Area, which is a land of startups. For example, Kruse also notes that very senior engineers are entering seed startups with salaries ranging from $180,000 to $235,000 in the Bay Area and $160,000 to $210,000 elsewhere. I discovered it. Entry-level engineers, on the other hand, don't get paid as much, even in San Francisco, which averages between $75,000 and $105,000.
Note that founders tend to get healthy raises with each funding round. The average salary for the Founder Executive category after Series A is $183,000, rising to $218,000 by Series B.
According to Kruse, starting salaries for entry-level employees in positions that are unlikely to be founders are:
Engineering, Intermediate Level: $100,000 to $145,000 Bay Area. Other tech hubs from $90,000 to $130,000 Sales, mid-level: Bay Area from $80,000 to $110,000. Other product titles from $70,000 to $100,000: Bay Area from $130,000 to $185,000; $110,000 – $175,000 Other Marketing, Mid-Level: $100,000 – $175,000 Bay Area. $80,000 – $145,000 Others
Employees also tend to acquire stock. This is one of the attractions of joining a startup. Carta's data on more than 8,000 initial grants shows how much money the first five employers can expect, and the grants tend to be awarded over four years.
1st person: Equity 0.5% to 4% (median 1.49%) 2nd person: Equity 0.3% to 2% (median 0.85%) 3rd person: Equity 0.21% to 1.2% (median 0.50%) 4th person : Equity capital 0.18% to 1% (median 0.85%) 0.44%) 5th place: 0.13% ~ Equity capital 0.8% (median 0.34%)
This article was originally published on December 2, 2024.