
Ask HN: Should you be paying your founders? - samstave
So we have been met with serious interest in our company, and we are established, older founders (all north of 35, with decades of experience)<p>Our potential investors do not like that the 3 founders are seeking salaries commensurate with what we do (already reduced as much as possible)<p>What would you do in this situation? What is normal? zero pay just wont maintain, partial pay is the trade-off, but how does one communicate &quot; well, people can&#x27;t work for nothing&quot; without sounding bad&#x2F;greedy.
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auganov
It's standard to pay founders livable but below-market salaries. In my
experience asking founders to completely forgo salaries is uncommon.

Now if it's a very small bridge round and they basically want you to take no
pay for a few months until you raise more - I think that's resonable.

Otherwise unless you're all part-time, want over $100k or have substantial
savings I think you're being taken advantage of.

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RaceWon
Rule #1: You can never get what you want in any negotiation without being
willing to walk away... even when it hurts; otherwise you're not negotiating
you are simply capitulating.

Rule #2 (and this could easily be swapped with Rule #1) You don't try to
negotiate with people who don't Desire what you have. If they don't desire it,
then you are simply selling the lowest possible price.

The key to successfully negotiating really is that they Have to DESIRE what
you have.

Greedy--well you folks likely poured your heart, soul, and imagination into
this. This isn't a hobby, and you're not children, it is how you eat.

And listen: if you have drop your salaries do it in very Small increments
during the rest of the negotiation. I'm assuming that they want to talk in
10,000 dollar increments--you Have to drive that conversation by using 1,000
dollar increments. That will set the tone and enable you to lessen the blood
loss... unless of course it blows the whole deal up. It might.

GL

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rajacombinator
Good rules. Any sources recommended for further rules?

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RaceWon
Thank you.

IMO negotiating is very similar to face to face selling. I'm not saying you
should read every sales and marketing book you can, get completely hooked on
it; then quit your job and go work in car dealerships for few years. That's
where I learned to negotiate (sometimes I really miss it) but that was quite a
while ago, so no I can't specifically recommend any resources that deal just
with negotiating.

I can recommend you read a few sales training books; Zig Ziglar was one of my
favorites. You'd be surprised how phrases like; "let's split the difference,
is that fair enough" work so well in so many different situations even when
negotiating a salary--you'd be stunned.

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mchannon
This is a common problem with investors.

Others may differ, but I think it's a red flag, if they want you to starve. If
you're dependent on the company, you'll become desperate to stay with the
company. This opens up the door for all kinds of acts, legal and illegal, to
screw you out of the share that you didn't sell to them.

I would have never believed it if I hadn't seen it firsthand, but it's amazing
how many in the moneyed class would often rather have 100% of nothing, out of
principle, than let an investee join the moneyed class by generating a massive
financial return for investors and entrepreneurs alike.

No deal is too good to walk away from.

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sharemywin
If you have nothing in it why would you stay when things get tough?

How can you ask investors and employees to invest in it if you aren't willing
to?

If you can answer those questions and still keep a full salary then your all
set.

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cimmanom
If your founders are spending their mental energy worrying that their kids
will be homeless and starving because they can't pay next month's rent without
a salary, how do you expect them to do their best work on the business or make
decisions for the long term? Most VC-backed businesses aren't profitable in
the short term, and even if they are you can't buy groceries in equity.

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softwarefounder
They don't value you, and they're making it clear. Asking for you guys to take
no pay is downright disrespectful, especially for experienced founders.

Consider other sources for funding.

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samfisher83
Asking for a salary doesn't sound greedy.

