
Younger Startup Founders Pay Themselves Lower Salaries - bjoernlasseh
http://thenextweb.com/insider/2014/01/22/startup-founder-salaries-younger-more-inexperienced-entrepreneurs-pay-themselves-less/?fromcat=all#!sWaaJ
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ritchiea
I missed the HN discussion of the previous article about founder salaries that
lead to this [1] but reading it now it's blowing my mind how sheltered from
reality the community here is. One HNer & startup founder says 80k doesn't go
very far in NYC, when the median income in NYC is around $50,000 so a lot of
people/families have to get by on less than 80k. I live in Brooklyn and
understand there is a lot in New York you cannot afford at 80k, but to suggest
that it "doesn't go a long way" is to completely misunderstand how fortunate
you are.

1\.
[https://news.ycombinator.com/item?id=7058840](https://news.ycombinator.com/item?id=7058840)

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malandrew
I'm curious about the median income in NYC for those on rent control and those
without it. You need to remember that most tech entrepreneurs in the city
probably moved there within the last few years and therefore don't have the
benefit of 10-20 year old rental rates.

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semerda
I don't believe the focus should be "how much" rather "is it enough to
survive". Are founders paying themselves enough to meet their basic needs of
survival (food, shelter, family etc) ref Maslow's hierarchy of needs. We all
have different circumstances and thus needs change too. Ref I am not talking
about wants, just needs :-)

Like in business it is a fine art of balancing it all out. Pay yourself too
little and our human basic needs to survive kick in (reptilian brain) and
instead of using your cognitive mind to focus on the business you focus on the
lack of money. So not paying yourself enough is very damaging for everyone
involved with the business too.

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DamnYuppie
This can be filed under "duh". Younger people, generally speaking, have less
obligations.

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scott_s
And it would be silly to do that. We should not dismiss findings if they
happen to corroborate our expectations; that makes us less likely to test our
expectations, which means we're less likely to find instances were our
expectations are wrong.

Further, you should especially not dismiss findings if you could constructive
a narrative for the opposite outcome. And, in this case, I can. If the result
had been that older founders typically pay themselves less, I can imagine an
explanation of "Older people, generally speaking, have more experience and
better understand what it takes to keep a business going."

Related:
[http://lesswrong.com/lw/im/hindsight_devalues_science/](http://lesswrong.com/lw/im/hindsight_devalues_science/)

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dllthomas
...or "Older founders generally have saved up more of a cushion for
themselves" or...

Good points well made.

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ryanSrich
I would love to see some statistics on location and personal debt (aka student
loans) in relation to these numbers.

I'd suspect that first time entrepreneurs that live in SF who also pay
themselves < 100k are free of personal debt. The only other option is that
they're just not paying their bills and live with 5 other roommates.

Can any first time entrepreneurs that make less than 100k chime in here?

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Eliezer
And do they pay themselves more equity, or are they just being screwed by
social expectations?

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elwell
I think it's mostly social expectations.

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kps
Except for the mention of ‘serial founders’, there's no attempt to correct for
levels of relevant experience. Is the ratio of founder/employee salaries the
same across different degrees of experience?

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refurb
Bingo.

I read an article a while ago about how biotech CEOs get paid way more than
tech CEOs (on average).

Of course, the reason for that is that there are very few 20-somethings
starting biotech companies (there are some!), but most tend to be 50+ year old
with 30 years of industry experience who left jobs with salaries in the low to
mid six figures. They take pay cuts too, but start from a much higher number.

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jfasi
These charts are completely unreadable. Can anyone here actually read this
chart without whipping out a color picker?

[http://cdn1.tnwcdn.com/wp-
content/blogs.dir/1/files/2014/01/...](http://cdn1.tnwcdn.com/wp-
content/blogs.dir/1/files/2014/01/Founder-Experience.png)

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stevenkovar
To me, a founder's age and experience has less bearing on salary than
circumstances of the business itself. I'd be interested to see:

    
    
      * Salaries of funded vs. unfunded founders
      * Salaries compared across age of the startup
      * Salaries compared across year-over-year growth rate

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eCa
I would like to see the "Founder salary and team size" graph per founder age.

Since team size seems to also be a strong indicator such a graph might show
which of age and team size is the stronger correlator.

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anthony_franco
It's also quite possible that younger founders have companies that produce
less revenue. Which would just be restating the first chart (higher revenue
companies lead to higher founder salaries).

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iterable
This is super valuable. $40K. Not much in SF!

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cgore
$40k isn't much anywhere in the US, not just in San Fransisco. Mississippi is
the poorest state in the US, with a median household income at $37,095.

Cite: [http://www.parade.com/166996/viannguyen/what-are-
the-10-rich...](http://www.parade.com/166996/viannguyen/what-are-
the-10-richest-and-10-poorest-states-in-america/)

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dllthomas
I wonder where X% or $Y over or under median has a bigger impact on quality of
life.

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sliverstorm
What do you think has the bigger impact on quality of life, services or goods?

X% over in a wealthy city is going to give you the most extra money, good for
buying BMW's, travel, and things on the internet.

$Y over in a poor city will make you locally wealthy, so you can eat at the
nicest restaurants, afford the nicest houses, and maybe have hired help.

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dllthomas
A good point.

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ffrryuu
They haven't wisen up yet :)

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ventures
interesting insights!

