A founder making $55k monthly revenue pays himself $60k yearly, less than his team of four, betting on 85% equity upside instead. His investor pushes back: founders should take market-rate salary once the business can afford it, to reduce risk and keep motivation high.
We're profitable, but I pay myself less than my employees. Doing $55K in monthly recurring revenue, profitable, team of 4. My salary is $60K, their salary is a lot more. Investors would call this stupid, pay yourself market rate, but I own 85% of my company. My upside is equity appreciation, not salary. Their upside is salary. Feels weird explaining this to people. They assume founders should be highest paid, and my situation being lower paid keeps it healthy. Maybe I'm rationalizing, but the math works and the team stays motivated. Yeah, I think you're rationalizing just a bit. You're still early. If you want to pay yourself— you're at least paying yourself something. That's better than most at $60K. Um, $55K in MRR, so, you know, business is still sub a million dollars in, in revenue. You probably shouldn't be paying yourself an absolute fortune. My question is, when do you start making more than your employees? At what point will you make more than your employees? Are you going to wait until the company sells and that's when you get your payday? Because in my experience, most companies don't sell, and you're better off de-risking it. You're better off as soon as the business can afford it getting yourself up to market rate. Not only is it good for you, not only is it more motivating, it just ensures that you're building a better, healthier business. And you making market rate and you getting basically starving to death is the difference between success and failure, you got bigger problems.
