Does anyone running a startup actually put money in a 401k? (Serious question.) I do not, nor do I know anyone else who does.
I also don't see how that's enough money to tip the scale.
I also don't see how that's enough money to tip the scale.
For reference, we started offering the 401k before our A round. At that point, we had raised $2M and were still under $1M ARR run rate. Based in the Bay Area.
I don’t get the narrative that startups pay very little or don’t offer any benefits. We pay competitive comp and offer good benefits to get great people. We’re an enterprise SaaS company, so maybe pre-revenue or consumer or hit-based companies are different. But even our first employee was well compensated. Though at that point, my cofounder and I were paying ourselves well below market and were living off savings.
We're entirely bootstrapped, but we provide a recurring service and it's taken me 2 years to hire our first employee. I don't think most companies can wait 2 years after launching to hire an employee (We couldn't even.. I had to bring in short-term help on numerous occasions).
We went just over two years in our venture-backed company before hiring anyone. Built the business to nearly $200k ARR. Everyone we told was amazed. But if 2 people can’t operate a business with only $200k top line, you don’t need a complex financial model to know that your economics aren’t where they need to be.
So, yes, you need to have revenues and cash before you can hire and pay salaries. 401k is only a little further out than that.