Can co-founders take variable salaries in a seed funded startup?


2

We have raised a small round from angel investors and have a problem with setting a fixed salary:

If we set a fixed salary, in the beginning stage of the startup, our monthly salary will increase our burn rate and thus expenses will be far above our revenue. i.e. We'll be paying ourselves more than we're bringing in.

If we set a variable salary (percentage of revenue), we would be taking a muchsmaller initial salary in order to make the funding last longer. But as our revenue increases, would the larger salary be an issue with investors?

I feel this would also be a motivation factor for my co-founder and I as well. Should we approach our angel investors with this or would that be a red flag for them?

Venture Capital Salary Founders Investors Cofounder

asked May 22 '15 at 10:57
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Michael Molloy
12 points

1 Answer


0

If you feel that it's an issue, I would suggest simply adding a maximum (and maybe minimum) salary within those payment terms.

The overall idea would not scare any investors, as it shows you're willing to be paid on results. As long as the numbers add up.

answered Jun 11 '15 at 14:43
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Venture Capital Salary Founders Investors Cofounder