Share0
Tweet0
Share0
Share0
Tweet0
Share0

Should the investor pay my salary retroactively?

Is it reasonable to ask an investor to cover the cost of my time in the company (1 year)? So If I’m asking for $800k, I would ask for $200k…?

If not, what is reasonable?

  • When you’re a founder you’re not entitled to a “fair” salary, nor is it the responsibility of the investor to reward you for time spent.

    I wouldn’t invest in a company just so a founder can write themself a $200k check.

    It’s pretty hard to justify a market salary when your business isn’t profitable yet. Retroactive pay is an even harder sell. YCombinator expects founders to take the smallest possible salary only, until profitability or series A.

    5k/month + 0 retro pay sounds about right. Less if you’re in a cheap COL area. More if you have kids or other responsibilities.

    Reply

  • Your reward for time spent is the valuation of the company. It is ridiculous to expect retroactive salary. However if you’re in financial deep straits some investors may work things out with you if they’re interested in investing just so you’re not going to go broke running the company.

    Reply

    • That said though if your startup was super hot like snapchat and there are multiple investors wanting to get in anything is possible. Snapchat guys took out 10M personally in one of their rounds as basically a bribe in order for them to take an investment.

      I’m thinking your startup isn’t a snapchat though.

      Reply

    • If he was worth anywhere near 200k /year then his company would make millions and he wouldn’t have to ask someone else to pay him a salary. Then he definitely wouldn’t need an investor to pay him that money.

      Reply

  • The issue at hand is founder commitment.

    Investors in general are very leery of any actions which can reduce founder commitment – cashing out early is right at the top of the list.

    Getting $200K “back pay” is exactly the founder offloading personal risk onto the investor – so that the investor is risking not just that the business fails, but that the founder has less reason to stick through difficult times/situations since their time is already paid for.

    If true financial stress exists, certainly ongoing living costs are not unreasonable – but as you can see from above, it isn’t a slam dunk either.

    Reply

  • Are you serious? No it is not reasonable at all.

    It is your company and if you want to get paid, it is your job as company owner/CEO to give yourself a salary.

    You can’t ask someone else to “back pay” you a salary if YOU fail to pay one yourself.

    Your time goes into the value of the company (in the case it’s successful), and the investor pays for that value, not for some time that you spent. And 200k in a startup? At an early phase? Are you high?

    Reply

  • It would make an investor question your real motivation / intent. Are you there to change the world? Or living to make sure you’re paid fairly?

    Which founder would you invest in?

    Reply
    • {"email":"Email address invalid","url":"Website address invalid","required":"Required field missing"}

    You may also like

    >