Compensation for founders and executives in startups
Posted on 20. Nov, 2008 by admin in Formation
Every founding team wants to know if their equity split is fair. Additionally, outside executives are often brought into early stage companies as “hired guns” and desire to be fairly compensated. After spending quite a bit of time researching the best sources of information on early stage company compensation, we’ve linked to a variety of posts by Noam Wasserman at Harvard. The amount of information available on his blog is absolutely amazing and invaluable for any early stage company. In addition to the posts, he also has a Compensation Study report available (current year is abridged if you didn’t participate, but previous years are complete and available for free). Below are the links for IT and Life Sciences companies. It should be noted that they include both founder and non-founder compensation information (salary, bonus, equity with founder stock and stock options).
For the IT reports, fill out this survey.
For the Life Sciences reports, fill out this survey.
Wasserman’s research also clarifies that a discount exists for founder compensation. Another interesting posts talks about splitting the pie, how the founding team splits equity.
Rich vs. King posts
- Rich vs. King – Core Concept
- Rich vs. King – Charts and Impressions
The Idea person
- Idea person’s initial role
- Second look at Idea person’s initial role, should vs. do.
- Idea premium, how much equity is it worth?
Other External Links
- Ask the VC, post 1 and post 2 and post 3
- Altgate referencing Noam Wasserman’s survey as well as Advanced HR
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