You just raised your first funding round. Or maybe you are bootstrapping profitably. Or your company hit $100K MRR. The question emerges: what is the right founder salary? Pay yourself too little and you burn out or make poor decisions from financial stress. Pay yourself too much and you shorten runway or signal wrong priorities to investors.
Founders earning $0 are often less effective than founders earning $80K. Financial stress kills focus. But founders earning $200K at seed stage burn 2-4 months of runway unnecessarily. This guide provides data-driven benchmarks to help you find the right balance for your situation.
The founder salary question reveals a fundamental tension in startups: you need to pay yourself enough to live and focus, but every dollar in founder salary is a dollar not spent on product, hiring, or growth. Unlike the equity split discussion that happens once, the salary question recurs at every funding milestone and revenue threshold.
This guide synthesizes data from Carta, Kruze Consulting, First Round Capital, and our analysis of 1,000+ cap tables to provide actionable benchmarks. The answer is not one-size-fits-all - it depends on your funding stage, location, personal financial situation, and company trajectory. But patterns emerge that help founders make informed decisions.
The single biggest determinant of appropriate founder salary is funding stage. As companies raise more capital and de-risk, founder salaries increase proportionally. The data below represents median salaries from 2024-2026 for US-based startups.
Median Founder Salary: $62,500
25th Percentile: $50,000 (taking minimal salary)
75th Percentile: $75,000 (higher cost of living areas)
Typical Funding Raised: $100K-$750K
Company Stage: Pre-revenue or minimal traction
At pre-seed, most founders have raised small angel rounds, friends and family capital, or secured accelerator funding. The company is typically pre-revenue or showing very early traction. Founders at this stage prioritize extending runway over personal compensation.
Median Founder Salary: $97,500
25th Percentile: $75,000 (conservative, extending runway)
75th Percentile: $120,000 (HCOL areas, experienced founders)
Typical Funding Raised: $1M-$4M cumulative
Company Stage: Early revenue, seeking product-market fit
Seed stage represents the first institutional funding round for most startups. Companies have typically raised $1-4M cumulative and are beginning to show traction - early revenue, growing user base, or strong engagement metrics. Founder salaries increase to reduce financial stress and enable focus on scaling.
The typical seed-stage salary increase from pre-seed is 30-50%, reflecting both increased runway and investor expectations that founders can focus full-time without financial distraction. However, founders should still take below-market salaries to preserve capital for growth.
Example Scenario:
Company raises $2M at seed. Two founders paying themselves $60K each pre-seed increase to $90K each. This adds $60K annually to burn but is considered reasonable by most VCs given the runway increase from the raise.
Median Founder Salary: $147,500
25th Percentile: $120,000
75th Percentile: $175,000
Typical Funding Raised: $5M-$15M cumulative
Company Stage: Proven product-market fit, scaling revenue
By Series A, companies have typically achieved product-market fit, are generating significant revenue, and are focused on scaling go-to-market and operations. Founder salaries increase substantially to reflect the reduced risk profile and increased responsibilities of managing larger teams.
The median jump from seed to Series A is approximately 50%. This reflects several factors: companies have 18-24 months of runway after the raise, founders are managing teams of 10-30 employees, revenue is growing 3-5x year-over-year, and investors expect founders to be compensated enough to avoid distraction or burnout. However, salaries remain well below market rate - a CEO with equivalent responsibilities at an established company might earn $250-400K.
Median Founder Salary: $175,000-$250,000
Range: Converges toward market rate
Typical Funding: $20M+ cumulative
Company Stage: Scaling operations, hiring executives
By Series B and beyond, founder salaries increasingly approach market rates for their roles. At this stage, the company is de-risked, revenue is substantial, and boards expect competitive compensation to retain founder talent. Many founders at this stage earn $200-300K, though still below what an external CEO might command.
| Stage | 25th %ile | Median | 75th %ile | Typical Raise |
|---|---|---|---|---|
| Pre-seed | $50,000 | $62,500 | $75,000 | $100K-$750K |
| Seed | $75,000 | $97,500 | $120,000 | $1M-$4M |
| Series A | $120,000 | $147,500 | $175,000 | $5M-$15M |
| Series B | $150,000 | $187,500 | $225,000 | $15M-$40M |
| Series C+ | $175,000 | $225,000 | $300,000 | $40M+ |
A $100K salary in San Francisco does not buy the same quality of life as $100K in Austin. Founder salaries should adjust for local cost of living while remaining below market rate. The benchmarks above represent baseline US geographies - apply these multipliers based on your location.
| Location | Multiplier | Seed Example | Series A Example |
|---|---|---|---|
| SF Bay Area | 1.30x | $126,750 | $191,750 |
| New York City | 1.25x | $121,875 | $184,375 |
| Seattle / Boston | 1.15x | $112,125 | $169,625 |
| Austin / Denver / LA | 1.00x | $97,500 | $147,500 |
| Remote (US) | 0.90x | $87,750 | $132,750 |
| International (Tech Hubs) | 0.70x | $68,250 | $103,250 |
These multipliers reflect both cost of living and local market expectations. A founder in SF earning $125K at seed stage is making the same quality-of-life tradeoff as a founder in Austin earning $100K. Both are taking below-market salaries to preserve runway, just adjusted for their local context.
Remote founders face a unique calculus. On one hand, lower cost of living areas enable longer runway on the same salary. On the other hand, some VCs expect remote founders to take lower salaries since they are not bearing SF/NYC living costs.
Every $10,000 in annual founder salary is approximately one month of runway for every $1M raised. Understanding this relationship helps founders make informed tradeoffs between personal compensation and company longevity.
Scenario 1: Conservative Salary (Seed Stage)
Funding Raised: $2M
Two Founders: $75K each = $150K annual salary cost
Other Burn: $250K/year (contractors, tools, marketing)
Total Annual Burn: $400K
Runway: 60 months = 5 years (highly conservative)
Scenario 2: Moderate Salary (Seed Stage)
Funding Raised: $2M
Two Founders: $100K each = $200K annual salary cost
Other Burn: $350K/year (first hire, contractors, marketing)
Total Annual Burn: $550K
Runway: 43 months = 3.6 years (appropriate)
Scenario 3: Aggressive Salary (Seed Stage - Risky)
Funding Raised: $2M
Two Founders: $150K each = $300K annual salary cost
Other Burn: $500K/year (team, office, growth)
Total Annual Burn: $800K
Runway: 30 months = 2.5 years (concerning for VCs)
After a funding round, founders should ensure at least 18-24 months of runway remains. Since fundraising takes 3-6 months, you need this buffer to raise the next round without running out of cash. If founder salaries push your runway below 18 months, you are burning too fast.
Another useful framework is tracking founder compensation as a percentage of total monthly burn rate. This metric signals to investors whether founders are being prudent stewards of capital.
| Salary % of Burn | Signal | Investor Perception |
|---|---|---|
| 0-15% | Highly disciplined | Concerns about founder sustainability |
| 15-25% | Appropriate range | Well-balanced compensation |
| 25-35% | On the high side | Justifiable if necessary for retention |
| 35%+ | Red flag | Signals misaligned priorities or desperation |
Founder salary increases should align with company milestones, not calendar dates. The right time to increase compensation is when the company has de-risked, extended runway, or hit significant traction markers - not simply because a year has passed.
The most common and justifiable time to increase salary is immediately after closing institutional funding. Typical increases are 20-40% per round, reflecting both the extended runway and the increased responsibilities that come with managing raised capital.
Example:
Pre-seed: $60K → Seed ($2M raised): $90K → Series A ($10M raised): $135K
Revenue milestones signal that the business model is working and that reinvesting revenue into founder compensation is justified. Common thresholds include $10K MRR, $50K MRR, $100K MRR, and $1M ARR.
Bootstrap Path Example:
$0 revenue: $50K → $25K MRR: $75K → $100K MRR: $100K → $250K MRR: $125K
If your company becomes profitable or runway extends significantly beyond the minimum safe threshold (18 months), increasing founder salary becomes less risky. Some VCs even encourage this to prevent founder burnout.
Calculation:
If you have $2M in the bank and burn $50K/month, your runway is 40 months. You could reasonably increase founder comp by $20-30K annually without endangering runway below 24 months.
If you transition from a 3-person team to managing 20 employees, your responsibilities have changed dramatically. Similarly, if you start generating real revenue after product-only focus, compensation adjustments may be warranted.
If you are genuinely unable to pay rent, considering side work that would distract from the company, or experiencing severe financial stress, a modest salary increase may be the best decision for the company - even if it is off-cycle. Better to pay yourself $80K and stay focused than pay yourself $60K and burn out.
VCs want founders compensated enough to focus, but not so much that priorities become misaligned. Understanding investor expectations helps founders navigate salary discussions without damaging relationships or signaling wrong priorities.
Venture capitalists invest in founders who are aligned on building maximum equity value. While they understand founders need to live, VCs interpret compensation decisions as signals about priorities and financial discipline.
Goal alignment: VCs want founders whose primary wealth creation comes from equity appreciation, not salary extraction. A founder earning $200K at seed stage signals potential misalignment - are they building a $100M+ outcome or optimizing for personal income?
Capital efficiency: Every dollar in founder salary is measured against alternative uses - could that money hire an engineer? Fund a marketing campaign? Extend runway?
Signaling and optics: High founder salaries can make it difficult to negotiate with employees (why should an engineer take $120K when founders are at $180K?) and can signal to later investors that discipline is lacking.
Frame the conversation around company stage and personal circumstances. "We have reached $100K MRR and extended our runway to 30 months. Given the increased team size (now 12 people) and responsibilities, we would like to discuss increasing founder salaries from $85K to $110K."
Reference industry benchmarks for your stage and geography. "Based on Carta data for Series A CEOs in our geography, the median is $147K. We are proposing $110K, which is 25% below median, reflecting our focus on capital efficiency."
Show that the increase does not endanger the company. "This increase adds $50K annually to burn. With $2.8M in the bank and $110K monthly burn, we still have 25 months of runway, well above our 18-month minimum threshold."
Be honest about why you are requesting the increase. "With two young children and rising childcare costs, the current salary is creating financial stress that is starting to affect focus. A modest increase would significantly improve stability."
The founder salary decision is fundamentally about balancing personal financial stability with company survival. Pay yourself too little and you make poor decisions from stress or distraction. Pay yourself too much and you shorten runway or signal misaligned priorities. The right balance depends on your personal situation.
Founders with children, aging parents, or other dependents require higher baseline salaries than solo founders. A founder with two kids needs $90-100K minimum to cover basic living expenses in most cities, while a solo founder with a working partner may survive comfortably on $60K.
Student loans, mortgages, and credit card debt do not disappear during your startup journey. Factor minimum debt payments into your required salary. A founder with $2,000/month in loan payments needs $24K more annual salary than a debt-free founder.
A working spouse can dramatically change your salary requirements. If your partner earns $80K and covers shared living expenses, you might comfortably take $50-60K from the startup. Single founders or those with non-working spouses need higher minimums.
Healthcare is a major expense in the US. A family plan can cost $1,500-2,000/month if not covered by the company. Some startups provide health insurance early, others expect founders to purchase individually. Factor this into your calculation - it can add $18-24K annually to required compensation.
A 24-year-old founder with minimal savings can more easily take $50K than a 40-year-old with a family and mortgage. Consider your career stage and what you are forgoing. If you left a $250K job to found a startup, taking $60K requires either significant personal savings or major lifestyle changes.
Step 1: Calculate your absolute minimum monthly expenses (rent, food, insurance, debt payments)
Step 2: Add a 10-20% buffer for unexpected costs
Step 3: Multiply by 12 to get annual minimum salary
Step 4: Add taxes (rough rule: salary / 0.7 to get pre-tax requirement)
Result: This is your floor - below this, you cannot function effectively
Rent: $2,200/month
Food: $600/month
Healthcare: $800/month
Debt payments: $1,000/month
Other essentials: $400/month
Total monthly: $5,000
Annual: $60,000
Pre-tax (divided by 0.7): $85,714
Minimum required salary: $86,000
How you structure founder compensation has significant tax implications. Salary, equity, and distributions are taxed differently. Understanding these differences helps optimize for after-tax income while remaining compliant with IRS rules.
| Compensation Type | Tax Treatment | Rate | When Taxed |
|---|---|---|---|
| Cash Salary | Ordinary income | 22%-37% federal | When earned |
| Founder Stock | Capital gains (if 83b filed) | 0%-20% federal | When sold |
| Stock Options (ISOs) | AMT at exercise, cap gains at sale | 0%-20% if held | Exercise + sale |
| Stock Options (NSOs) | Ordinary income at exercise | 22%-37% federal | Exercise + sale |
Founders primarily compensated through equity (with 83b elections) can achieve significantly lower effective tax rates than those taking high salaries. A founder earning $150K salary pays 24-32% in federal taxes, while a founder earning $80K salary + equity upside pays 24% on salary but only 0-20% on equity gains at exit.
When founders receive stock subject to vesting, they should almost always file an 83(b) election within 30 days. This election allows you to pay taxes on the stock's value now (typically $0 or very low at founding) rather than as it vests.
Without 83(b): If you receive 1M shares worth $0.001 at founding, and they vest over 4 years while the company grows to $10/share, you owe ordinary income taxes on each vesting tranche at current FMV. By year 4, you might owe $2.5M in taxes on shares worth $2.5M - requiring you to sell shares just to pay taxes.
With 83(b): You pay tax on $1,000 (1M shares x $0.001) in year 1, then owe no additional taxes until you sell. All appreciation is taxed as capital gains at sale.
You must file the 83(b) election within 30 days of receiving founder stock. This deadline is absolute - missing it can cost you hundreds of thousands or millions in unnecessary taxes. Work with a startup attorney to ensure proper filing.
Your company structure affects how founder compensation is taxed. Most venture-backed startups are C-Corps, but bootstrapped companies may consider S-Corps or LLCs.
Salary is deductible to the company and taxable to the founder. Dividends are not common in early-stage C-Corps. Double taxation at exit (company pays corporate tax, founders pay capital gains) but mitigated by Qualified Small Business Stock (QSBS) exemption which can exclude up to $10M or 10x cost basis from capital gains.
Pass-through taxation - income flows to founders' personal returns. IRS requires founders to take "reasonable salary" as W-2 employees. Remaining profits can be distributed without payroll taxes, offering tax savings. Not compatible with most VC funding (investor restrictions).
Default pass-through taxation similar to S-Corp but more flexible. Can be taxed as C-Corp if desired. Distributions are subject to self-employment tax (15.3%) in addition to income tax. Popular for bootstrapped companies but difficult for VC funding.
State income taxes significantly affect take-home pay. A $100K salary in California ($8-9K state tax) is worth less than $100K in Texas ($0 state tax).
| State Category | Examples | Top Rate | Impact |
|---|---|---|---|
| No state tax | TX, FL, WA, NV | 0% | +8-13% take-home vs high-tax states |
| Low tax | CO, NC, AZ | 4-5% | Modest impact |
| Moderate tax | MA, OR, MN | 6-9% | Material but manageable |
| High tax | CA, NY, NJ | 9-13% | Significant reduction in take-home |
Startup founder salaries vary significantly by funding stage. Pre-seed founders typically pay themselves $50,000-$75,000 annually, seed-stage founders earn $75,000-$120,000, and Series A founders can expect $120,000-$175,000. These ranges adjust based on location, with SF Bay Area and NYC founders earning 20-30% more than the baseline. The key is balancing personal financial needs with runway preservation.
The average startup CEO salary depends heavily on funding stage. At pre-seed, CEO salaries average around $62,500. At seed stage, the average is approximately $97,500. By Series A, startup CEO salaries average $147,500. These figures are for base salary only and do not include equity compensation, which typically represents the majority of total compensation for early-stage founders.
Co-founder salaries do not need to be identical, but they should be equitable based on circumstances. Factors that justify salary differences include: different personal financial situations (e.g., one founder has a working spouse), different roles requiring different market rates, or different time commitments. However, large disparities can create tension, so most startups keep founder salaries within 10-20% of each other.
Founders should consider salary increases at key milestones: (1) After closing a funding round - salaries typically increase 20-40% per round; (2) When reaching significant revenue milestones like $50K or $100K MRR; (3) When runway extends beyond 18-24 months; (4) When the company becomes profitable. Always discuss with your board before adjusting compensation.
Founder compensation directly impacts runway. For example, two founders taking $100K salaries each adds $200K to annual burn, which could represent 2-4 months of runway for a seed-stage company. The calculation is: each $10K of monthly founder salary (total) reduces runway by approximately 1 month for every $1M raised. Balance your personal needs against the company's runway requirements.
Yes, most founders should take at least a minimal salary even pre-revenue, for several reasons: (1) It is important for personal financial stability and focus; (2) Investors expect founders to be paid something after raising capital; (3) It establishes a compensation structure for future employees. However, pre-revenue salaries should be at the lower end of benchmarks, typically $50K-$80K annually.
Yes, VCs pay attention to founder salaries. They want founders compensated enough to focus on the business without financial stress, but not so much that it signals misaligned priorities or burns cash unnecessarily. Most VCs are comfortable with salaries at or below the 50th percentile for the stage. Always be transparent with your board about compensation decisions.
Location significantly impacts appropriate founder salaries. SF Bay Area founders typically earn 30% above the baseline due to higher cost of living. NYC adds about 25%, Boston 15%, while Austin represents the baseline. Remote founders often take 10% less, and international founders (outside major tech hubs) may take 30% less. These adjustments reflect both cost of living and local market rates.
The right founder salary balances your personal needs with company runway. Use our interactive calculator to determine appropriate compensation for your stage, location, and circumstances.
Pre-seed founders average $62,500, seed-stage founders $97,500, and Series A founders $147,500 annually
Location matters significantly: SF Bay Area founders earn 30% more, NYC 25% more, while remote founders often take 10% less
Each $10K in founder salary reduces runway by ~1 month per $1M raised - balance personal needs against company survival
Salary increases should align with milestones: funding rounds, revenue thresholds, or extended runway - not arbitrary time periods
VCs expect founders to take below-market salaries that signal alignment on building equity value, not extracting cash
All co-founders should earn similar salaries with differences no larger than 10-20% to avoid creating tension
File an 83(b) election within 30 days of receiving founder stock to minimize taxes on equity appreciation
Calculate your minimum required salary by working backwards from essential expenses, then adjust based on company stage and runway