SaaStr · 2021-06-03
· 1826d
Founder Compensation Strategy: Pay Yourself a Market Salary Early
Jason Lemkin shares lessons from founding two SaaS companies about the importance of paying yourself a competitive salary early in startup development. Rather than working for free to conserve capital, founders should prioritize market-rate compensation once the business can afford it or after securing sufficient funding for 12+ months of runway, as underpayment can undermine accountability and founder well-being.
Metrics in this report
Initial Funding
9$M
raised
First SaaS startup (pre-Web 2.0 era)
Minimum Runway Threshold
12months
recommended
For founder salary decision trigger
Series A Funding
2$M
raised
Second SaaS startup (Adobe Sign/EchoSign)
Series A Runway Extension
2years
achieved
Through cost-cutting measures including no founder salary