This question comes up a lot from founders starting a company and raising a seed round—how much should you pay yourself?
On the one hand, you don’t want to be distracted worrying about your livelihood so you can focus on the business. On the other hand, it would be very odd to pay yourself a high salary while also having the largest upside if things go well via ownership.
Benchmarks of what other companies are doing might help. A survey of founder salaries by Pilot found that startups that have raised between $1MM and $3MM have an average salary of $109K. However, the average is not particularly useful and there are plenty of founders who will pay themselves $0 or the lowest amount legally required (minimum wage). Kruze consulting found that average startup CEO salary was $150k in 2023 (median $140k).
As a general rule of thumb, if you raise a seed round between $2MM to $3MM and you live in a high-cost-of-living area (SF, NYC) a startup CEO’s salary should be around $150k—any more should raise questions. As another rule, if an early-stage startup CEO has the highest salary in the company something is probably off.
- This might change when running a startup during a recession, but from the benchmarks listed earlier that has not affected CEO salaries in 2022
- The number one job of a startup CEO is finding product market fit