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, technical engineering/product positions tend to pay more than CEOs. One surprise is that salaries for those with the COO/Operations title tend to be even higher on average. This is frowned upon. That's because the title Operations/COO can signal to seed VCs that you're a third co-founder with no clear role. In a small company, there aren't that many tasks to perform. 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 startup land. 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, can't afford to be paid anywhere from $75,000 to $105,000 on average, even in San Francisco.
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 with titles that are unlikely to be Founder are:
Engineering, Intermediate Level: $100,000 – $145,000 Bay Area. $90,000 – $130,000 Other Technology Hubs Sales, Mid-Level: $80,000 – $110,000 Bay Area. $70,000 – $100,000 Other product titles: $130,000 – $185,000 Bay Area. $110,000 – $175,000 Other Marketing, Intermediate Level: $100,000 – $175,000 Bay Area. $80,000 – $145,000 Other
Employees also tend to acquire stock. That's 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%)
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