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Startup Salaries: Why Less is More

By: SmallBizClub

 

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Think you could strike it rich by starting your own company? You’re not the only one.

 
It’s no surprise many entrepreneurs dream of becoming millionaires. After all, the startups we always hear about are the wildly successful ones. Mark Zuckerberg is now one of the top 20 richest people in the world after starting Facebook in his college dorm room, and Jeff Bezos is worth billions after starting Amazon out of his garage.
 
But most startup founders are far from billionaires, even if their companies are successful. In fact, the majority of startup founders make less than $50,000 per year.
 
Most of us would choose a much bigger number if we had the power to name our own salary.
 
But besides taking into account the budget and expenses of your business, there are a lot of other factors that come into play when founders calculate their salaries.
 
Not everyone needs or even wants to earn hundreds of thousands of dollars every year. Just like in a more traditional job, your salary will be determined in part by your experience, your cost of living, and the success of your company.
 
And a big salary for a startup founder can have wide ranging effects besides adding onto your company’s expenses, such as setting high expectations for all your employees.
 
After taking all these factors into account, it’s no surprise that many startup founders will make their salary smaller than you might expect. In fact, venture capitalist and entrepreneur Peter Thiel said that the lower a CEO’s salary, the more likely they are to succeed, and that the number one predictor of a startup’s success is low CEO pay. He suggests founders pay themselves no more than $150,000.
 
If your top priority is to get rich from your startup, you might be better off working your way up the ladder in a more traditional career in an established company.
 
Wondering exactly how startup founders determine their salaries, and how all these factors that come in to play? Check out the statistics below and the numbers might surprise you.
 
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This infographic was originally published by WhoIsHostingThis
Published: December 11, 2014
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