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Several years ago, I did a bit of research into founder compensation and created a simple model that calculates what a typical founder salary might look like based on a few input factors. The post became surprisingly popular — not because it was based on particularly extensive benchmarking research (it wasn’t) but because “How much should I pay myself?” is a question that every founder needs to answer, and there had been little data or guidance available.

Since the post is now more than five years old and got a little rusty, I thought it was time for an update. Luckily, we recently led an investment in Figures, the leading compensation benchmarking platform in Europe, so naturally, we’ve teamed up with Figures for this post and the updated calculator.

The notes and charts below provide additional details on the dataset and the methodology used for the model and I’d recommend that you give it a quick read. But if you’d like to head over to the calculator right away, here it is!

Some notes:

The analysis is based on 728 data points provided by Figures. Figures collects live data from 1000+ start-ups and later-stage tech companies across Europe by connecting to its clients’ HRIS APIs.
The charts display total cash compensation, including cash bonuses where applicable, but excluding equity.
If there were fewer than three data points for a given slice of the dataset, we excluded it from the respective chart. That’s why, for example, the “Founder Salaries at Series C by Location” chart shows only five location bars. The number of data points is noted in parentheses after the location.
The calculator uses a simple formula based on the data for Paris and Figures’ “Location Factor”. The main reason for this approach is that for many location and stage combinations (e.g., Series A in Prague), we don’t have enough data points. The location factor is based on a cost of living analysis, cost of market evaluation, and other factors.
Like the original calculator from 2017, I included a “kids bonus”.
As expected, founder salaries depend highly on your stage, so let’s look at the data broken down by stage. In the so-called candlestick charts below, the lowest and highest salaries from the dataset can be seen at the bottom end of the bottom wick and the top end of the top wick, respectively. The bottom of the candlestick marks the 1st quartile, and the top of it shows the 3rd quartile.

Founder Compensation at Seed

At the seed stage, most founder salaries are in the €70–100k range. What’s surprising is that Amsterdam is below Barcelona, although Amsterdam is significantly more expensive than Barcelona. I’d blame the small number of data points here.

Founder Compensation at Series A

Good news for Dutch founders, at the Series A stage, the numbers look better for Amsterdam. ;-)

Founder Compensation at Series B

As you can see here, Figures’ dataset is particularly rich for Paris, and 50% of the data points for Paris fall into a pretty narrow range (ca. €96–121k). So for Series B founders in Paris, the data on “what’s market?” is much more robust than in many other cases.

Founder Compensation at Series C

Don’t pay too much attention to the huge number for “remote”. It’s based on three data points only.

Founder Compensation pre-Seed to Series C

Gender Pay Gap

The dataset from Figures also includes information about gender. Here are the average and median founder salaries at Seed and Series A.

The dataset is small for female founders (25 at Seed and 23 at Series A), but it does point to a statistically significant difference. The gap isn’t huge (but not negligible either), and again, it’s a small dataset, but there’s enough here for me to say: female founders, get yourselves a little pay raise! 🙂💪🦸‍♀️

For Series B and Series C, we only got 8 and 4 data points for female founders, respectively, not enough to calculate averages and medians in a meaningful way. That is another (big) problem in and of itself, of course.

What has changed?

The 2017 version of the calculator used this logic:

Start with $50,000
Multiply by 1.5, 1.9, or 2.3 for Series A, B, and C, respectively (Seed=1)
Add $10,000 per kid
Multiply by 1.3, 1.5, or 1.8 for Paris, London, and SF, respectively (Berlin=1)

In the 2023 version, we’ve changed it to:

Start with €60,000
Add €15,000 for Seed, €25,000 for Series A, €35,000 for Series B, or €65,000 for Series C (Pre-Seed=0)
Add €10,000 for each kid
Multiply by 1.04 for Berlin and 1.2 for London (Paris=1). (We didn’t include SF this time, but we added ca. 80 European cities)

If you look at the output for a couple of scenarios, you’ll notice that our model suggests a substantial increase for Seed founder salaries but no significant increase at later stages. An exception is Berlin, which, according to Figures’ location factor, is now as expensive as Paris. As a result, the suggestions for Berlin are significantly higher in 2023 across all stages. Twenty years ago, Berlin’s former mayor Klaus Wowereit famously dubbed the city “poor but sexy”. We’re no longer that poor, but hopefully still sexy! ;-)

Links:

Thank you to Figures for the data, and thank you David Ola for your help with the calculator and blog post!

How Much Should you Pay Yourself?