Compensation Structure for Early Companies

Posted on | October 21, 2008 | 1 Comment

Just got this from planetvc today.

Matt McCall who writes at VC Confidential recently posted a compensation structure for typical early stage companies. Matt stressed out that what he meant with ‘early’ is not start-up at bootstrap phase. At which, salaries are much lower, but equity ownerships are higher. I am a little surprised that the structure is a little flatter among job functions in the salary side. However, there are major differences in equity spread, and bonuses. I guess this structure is designed to control the company burn rate, and to assure that people focus on expanding the value of the company.

For the full report, go to Matt’s post, but here is the salary structure:

CEO (non-founder)
Salary $180-200k, bonus $50k+, equity around 5-7%

CMO
Salary $150-175k, bonus $50-75k, equity around 2%

COO/CFO
Salary $150-$175k, bonus $50k, equity 1-1.5%

VP, Sales
Salary $150k, bonus tied to sales (usually in the $50-75k+ range), equity of 1-2%

Other VP spots
Salary $140-150k, bonus $25-50k, equity 0.75-1%

Director and below
The market will dictate these. Directors usually in the $110-130k range, key programmers in the $90-120k range, controller in the $50-80k range depending on experience.

Comments

One Response to “Compensation Structure for Early Companies”

1. Jes
   October 22nd, 2008 @ 8:44 am

   If you were bootstrapping the percentages would be higher.

   Much of these numbers are this low to 1) cut out a share for the VCs, and 2) cut out future shares for additional rounds. It’s a built-in “tax” of using VC money to fund the business.

   If you bootstrap you are going to “cash out” at the bootstrap exit which would be IPO or M&A.

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