How to Set Founder Salaries Without Losing Investor Trust
A practical guide to balancing personal pay, company runway, and investor confidence.
One of the trickiest questions for any startup founder is simple on the surface: how much should you pay yourself? The truth is, the wrong number can hurt your company just as much as it can hurt you. Pay too much and investors get nervous. Pay too little and you risk burning out before your company even has a chance to grow.
Why Founder Pay Is Different
Founders are in a unique spot. You own part of the business, but you’re also an employee who needs a paycheck. Your salary has to cover basic living costs today, while your equity, the shares you own, represents the long-term reward if the company succeeds. In the early days, most founders live lean and take home far less than they could earn elsewhere. Once the company raises money or grows revenue, salaries can go up.
Data from Kruze Consulting, a well-known startup finance firm, shows that in U.S. venture-backed companies, founder CEOs usually make about $133,000 at the seed stage, $183,000 at Series A, and $218,000 at Series B. These are averages. Some founders take less, but very few get away with taking much more at the same stage.
What You Need to Think About Before Picking a Number
Stage of Your Startup
If you’re bootstrapped or just getting started, cash is tight. Most founders take only what they need to survive. After raising outside funding, you can afford a more realistic salary, but investors still expect you to keep it reasonable.
Market Comparisons
You don’t have to guess. Look at salary reports, startup surveys, or talk to other founders. A common rule of thumb, suggested by startup community SaaStr, is to pay yourself about 75 percent of what you’d earn in the same role at a normal company. That way, you can cover living costs without losing sight of the bigger equity prize.
Investor Perception
This is a big one. If your salary looks high compared to the stage of the company, investors may assume your priorities are off. They want to see founder pay clearly listed in your budget and financial model. Surprises here never go well.
Role Differences Between Co-founders
Not all co-founders bring the same value. A technical founder, for example, may deserve a bit more than a co-founder running operations if their skills would command a higher paycheck elsewhere. That said, pay gaps within a founding team should be openly discussed to avoid resentment.
Runway and Cash Burn
Every dollar you pay yourself is a dollar the company can’t spend on building product, hiring talent, or getting customers. Founder salaries should never put the company’s survival at risk.
A Simple Step-by-Step Approach
- Figure out your personal minimum. Calculate what you need to live without constant financial stress.
- Check the company’s budget. Look at burn rate, cash in the bank, and how long you need that money to last.
- Compare to the market. Use startup benchmarks for your stage and location.
- Start small with a plan to adjust. Tie raises to hitting milestones like raising the next round or reaching a revenue target.
- Be upfront with investors. Show them your salary in projections so there are no surprises.
- Review regularly. Revisit your pay as the company grows and your financial picture changes.
What Founders Typically Earn in the U.S.
- Seed stage: $120,000 to $140,000
- Series A: $170,000 to $200,000
- Series B and beyond: $200,000 to $250,000 or more, depending on performance and market
These figures, from Kruze Consulting and afino.ai, are averages in U.S. venture-backed tech startups. If you’re outside the U.S., adjust for the cost of living and local salary standards.
Common Mistakes
- Paying yourself more than early employees. This creates resentment and worries investors.
- Hiding your pay from investors until after a funding round. That destroys trust.
- Not paying yourself at all. Some founders burn out because they can’t afford their own bills.
- Deciding pay based only on gut instinct. Benchmarks and financial discipline matter.
The Balance That Works
The sweet spot is simple: take enough to stay focused, but not so much that it signals greed or short-term thinking. Keep your base salary conservative, define clear moments when it can go up, and always be open with investors.
At the end of the day, the real payoff for founders is not the paycheck. It’s the equity. The salary just keeps you in the game long enough to see that equity pay off.
Connect With Us On Social Media [ Facebook | Instagram | Twitter | LinkedIn ] To Get Real-Time Updates On The Market. Entrepreneurs’ Diaries Is Now Available On Telegram. Join Our Telegram Channel To Get Instant Updates.
Isabella is a global business journalist and former McKinsey analyst from Brazil. She brings sharp insights on economic shifts, policies, and founder journeys from around the world.
