
Ask HN: How Founding Engineers Comp Works? - dadoge
Coming from being a senior eng at a BigTechCo, I am exploring being a founding engineer “with a path to leadership” at a seed company based in Expensive Coastal City.<p>How much of a decrease in comp should I expect?  Are there ever any other forms of comp to make up for the temp decrease in total comp beyond waiting for an exit?  e.g. bonus structure after new funding round or $X in revenue?<p>The work is interesting, I’m just worried where I live is too expensive to justify a steep total comp pay cut for over 5 yrs, esp since I’m in mid 30s
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davismwfl
Honestly, too many unknowns to answer this with any real specificity.

In general though, comp will depend on a lot of factors, some key ones are the
amount raised, the runway needed to get to the next round or milestone, your
personal experience, # of founders, and your percentage of ownership. The
general rule is as a founder you will take the smallest salary possible to
live for the first year or two until you reach some milestones, then usually
during one of the funding cycles you can take a pay raise and if things are
going well it usually opens some other options like leveraging some of your
personal ownership. Bonuses are usually fair game if the team is hitting
milestones (especially to retain people), but remember, if the company is
taking investors money they want their money to go to making the business
successful more then lining founders pockets. No one at a startup should be
stuck at the same salary for years on end (outside the first year or so), that
is generally a sign of a stalled or failed company, this includes the founders
IMO. Of course, that said many founders will choose to take the smallest
salary possible for as long as possible to keep that money in the company to
grow faster, but is a choice and not because the company can't do better.

To be a little more specific, I have seen everything from minimum wage on up
for founders. Investors know you need to eat and live, so as long as the
company plan seems reasonable and they fund it then you are good to go. I
don't think you can say there is a one size fits all rule. That said, from
things I have seen personally, many founders take minimum wage (typically
young college age founders), while others typically with more experience take
$50k-75k. When you start going over $100k and you own any decent percentage of
the business it usually will require more justification to investors, at least
that I have seen. In the end though, it all comes down to the deal economics,
the founding team and the initial investors.

