SaaStr · 2023-10-19
· 958d
VC Perspectives on Founder Salaries: The 75% Market Rate Rule
Jason Lemkin discusses VC expectations for founder compensation, establishing the 75% market rate rule as a general guideline for well-funded startups. The article explores how appropriate founder salaries vary by stage, funding level, and company maturity, while cautioning that founders should not be the highest-paid employees, especially pre-Scale.
Metrics in this report
Critical Scale Threshold
$10,000,000$
ARR
pre-Scale definition
Founder Compensation Rule of Thumb
75%
of market
well-funded startups beyond seed
Founder Salary - $10M ARR
market rate$
full market
at $10M ARR threshold
Founder Salary - $1M ARR
$120,000$
annual
at $1M ARR milestone
Founder Salary - 75th Percentile Adjustment
$238,000$
annual
after adjusting to 75th percentile
Founder Salary - Early Stage with Some Funding
$10,000$
monthly
post-seed with some capital but not well-funded
Founder Salary - Post-Seed Round
$92,000$
annual
after seed funding
Founder Salary - Post-YC
$30,000$
annual
after YC funding
Founder Salary - Pre-Revenue/Prototype
$0$
typical
self-funded prototype stage
Founder Salary - Series A
$145,000$
annual
post-Series A funding
Founder Salary - Series B
$182,000$
annual
post-Series B funding
Founder Salary - Very Early Stage
$10,000$
annual
very early with minimal cash