One of the trickiest questions for founders is: how much should I pay myself?
In the early days, founders want to be putting any extra cash towards the business, not their bank account. But they also need to pay rent and we know financial worries can be a huge source of founder stress.
It’s also been a difficult question to answer because few founders publicly divulge how much they pay themselves.
This month, VC Creandum and startup conference Slush released data showing founder salaries across Europe, based on responses from 650 founders in 47 cities from pre-seed to Series B and including bootstrapped founders.
So which founders in Europe are getting by on €28k a year — and which ones are bringing home €200k? And in which sector do founders make the most? Here are the takeaways.
Founder salaries get higher as their startup raises more money
It goes without saying that if you’ve raised more money, you can probably afford to pay yourself a bit more as a founder. Median salaries across Europe for pre-seed companies are just under €50k, while founders are making over €100k by Series A and €140k by Series B.
Founders in the UK make the most at later stages; CEE and Baltics founders make the least
UK founders make more money than those in any other region in Europe. Series A and Series B founders in the UK are making roughly €200k a year.
The lowest-paid founders are in central and eastern Europe and the Baltics. The median salary for a bootstrapped founder in CEE is just €28k, and €42.7k in the Baltics. The Baltics is also the only region where founders are not making at least €100k per year at Series B.
Creandum’s head of talent, Michelle Coventry, writes that these countries generally have a lower cost of living and that there are fewer big tech successes for founders to compare themselves to, which could explain some of the discrepancies.
Founders in fintech make the most at Series A
There isn’t a huge difference between salaries in different sectors, especially at the early stages. But at Series A, fintech founders make the most, taking home nearly €160k a year.
Coventry says that that’s because the sector is so well-funded, and because fintech founders “tend to come from high-paying jobs in banking, finance and management consulting, having higher salary expectations as a result”.
Note to self: think like a Series A fintech founder when next negotiating pay.
Women founders pay themselves less than men founders
Slicing by amount raised, women founders pay themselves less across the board. The biggest discrepancy is for founders who have raised between €11m and €20m — in this bracket, women pay themselves €68k on average, 56% less than their male counterparts.
However, by the time companies have raised over €50m, that difference is just a little more than 10%.
The outlook for founder salaries
As inflation continues as does the tougher fundraising environment, Coventry says that for the time being founders are more likely to reward top talent — rather than upping their own salaries.
Eleanor Warnock is Sifted’s deputy editor and cohost of Startup Europe — The Sifted Podcast, and writesUp Round, a weekly newsletter on VC. She tweets from @misssaxbys
