Almost every founder who closes a round asks the same question. How much of this should I pay myself?

My answer is usually less than they expect. 

Now I know what you're thinking, “classic thing for a VC to say.” Hear me out.

I think about founder pay as a share of the raise. Two founders who raise $2M to cover 18 months of runway should be spending somewhere between 10-20% of it on themselves. That works out to $200,000 to $400,000 total, or roughly $67,000 to $133,000 per founder per year.

The lion's share of investor capital belongs to growing the business. Besides increasing net profit, the simplest way for a founder to extend runway is by taking less cash.

Kruze Consulting publishes the most-cited annual numbers on founder pay. Seed CEOs now average $153,000, up from $147,000 in 2025 and $132,000 in 2024. Series A CEOs average $203,000. Series B CEOs average $216,000, still below the 2022 peak of $262,000.

That $153,000 is on the higher end. I believe the averages are pulled up by large coastal seed rounds and cost of living of course. A founder who raised $6M in San Francisco and a founder who raised $1.5M in Kansas City are building on very different budgets, and an average blends them together. 

Founder salaries shouldn’t be where you’re getting rich. Same thing goes for GPs and management fees.

The last few years show how much these numbers move. Median seed-stage founder salaries dropped roughly 20 to 30 percent from their 2021 peak as fundraising tightened and founders extended runway by taking less cash. They've since rebounded with round sizes.

Salaries follow the market with a lag. The right number for any founder is a function of their runway. What peers are paying is just a lagging indicator.

I've seen founders get this wrong in both directions.

The first founder takes zero. It feels noble. Then personal savings run out around month nine, and suddenly they're picking up consulting work on the side or making desperate decisions about the company to cover rent. Taking zero doesn't buy them any more ownership either. The cap table was set the day they closed. It's the wrong kind of frugality.

The second founder closes the round and shows up to the next board meeting in a new luxury car. Investors notice. Every dollar spent on that lifestyle is a dollar that never made it into the product, the team, or the customer.

The right salary sits between those two. It’s “enough to not be distracted.” It's the number at which a founder can stop thinking about money and start thinking about the company. Below that number, financial stress degrades decisions. Above it, every extra dollar is pure drag on runway.

Think sub-market and sustainable, not heroic and brittle.

A founder who's married with two kids and a mortgage may genuinely need $120,000. A 22-year-old with three roommates might be fine on $60,000. A career veteran with years of savings behind them might take even less.

All three can be scrappy. Scrappy is relative to what a founder would otherwise spend. It was never an absolute figure.

This is also why co-founders sometimes pay themselves differently. That works as long as it's discussed openly before the money hits the bank account.

Around 85 percent of startups use some form of location-based salary adjustment for their teams. For founders, I see it a little differently. I believe a Midwest founder's cost advantage should show up as more runway. A founder in Columbia or Omaha paying themselves San Francisco rates has handed that advantage right back.

According to Carta, the median seed-stage team is now just four employees. When the founders are half the company, their salaries make up a much bigger share of burn than they did a decade ago.

I wrote recently about the case for solo founders and how much companies can now build with less. The same logic applies here. AI lets small teams do more, so every dollar of payroll carries more weight.

The gap between a $150,000 salary and a $100,000 salary is $50,000 a year. That's a part-time contractor or a year of a serious tools budget. On a $300,000 annual burn, it's two extra months of runway. When I ask founders which of those they'd rather have, almost all of them pick the runway.

Salary is a signal. Payroll and cap table tools make founder salaries visible. When a Series A lead does diligence, that number becomes an implicit data point on how a founder handles capital. 

Founder pay also shapes who you can hire. Early employees almost always make more than the founders, and that's how it should be. Every dollar a founder doesn't pay themselves can go toward landing an exceptional engineer or operator. Low founder salaries are how small teams afford great talent.

The best founders agree on raises beforehand. Hit a revenue target or close the next round, and pay goes up. The board signs off up front, so nobody has to negotiate it later.

Raising money is not an opportunity to pad pockets. Founder wealth comes from growing the equity in the business. The founders who get there are scrappy with their own lives the same way they're scrappy with their companies.

A founder's salary is what they'll make if the company fails. Their equity is what they'll make if it works. 

The best founders I know optimize for the second outcome.