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Comment by me_jobs_r_u_woz | Hacker News Reader

I beg to differ.

In the Bay Area, VCs expect and want the founder/CEO to make approximately $150K to $175K per year after the VC round (i.e. Seies A). I have confirmed this by asking VC panels here in Orange County during open-mike sessions.

What should be clearly understood is that you are actually financing a part of that compensation via your significant equity dilution that would result from the new vesting schedule put in place by the VC! You typically can't escape this new vesting if you want VC money...which is why PG's question about how much cash will you take to just walk away from it has real substance behind it.

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As I said, rich is subjective. My last job paid just shy of your quoted salary and I would not consider that to be rich. Very well off, yes, but not rich. Rich, to me, is what you have behind you in your savings and investments, not what you have to look forward to in salary and the like.

I agree with everything else that you said though.

Ok:

This seems useful, but I don't fully understand it. Are you saying that the VCs will force you to take a high salary, so that they can take a bigger chunk of your company?

No. They will not do that. No good VC would not force you to take a high salary if you would rather the money went into the business. They'd probably even like that. A founder should be setting the vision and culture of the company. Compensation is one piece of that culture. You set a precedent by taking a big salary and you set a message by taking a small one (i.e. Jet Blue - CEO, COO, CFO each have a base salary of $200,000 / turned down bonuses during bad years).

It's not a question of forcing. It's the norm. All other things being equal, why should someone take a lower salary?

And there are other factors. If your compensation becomes a benchmark for the rest of the team, now your company is in real trouble. You can't expect to hire key team members at less than the norm. It just won't happen. VCs know that.

Also, a VC's main job is to put out as much of their committed capital as possible into good deals. Allocating a large part of a preferred equity tranche to fund the maintenance and creation of a solid team is the right thing to do.

And comparing with large companies is not apples to apples. That's a different world; here's an extreme example of that world: http://valleywag.com/tech/greed/the-grotesque-1-salary-251104.php

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