When it comes to seed-stage startups, one of the most pressing questions for founders is how much to pay themselves and their initial employees. A recent analysis by Kruze Consulting, a CPA firm specializing in venture-backed startups, provides valuable insights into this critical aspect of startup development. Based on actual payroll records from over 450 seed-stage startups, the data offers a comprehensive look at the average salary ranges for founders, engineers, and other early hires.

Perhaps unsurprisingly, technical engineering and product positions tend to command higher salaries than the CEO role. However, one surprising finding is that COO/operations executives tend to earn even higher salaries, averaging $135,000. This is noteworthy, as the COO/operations title can sometimes raise red flags with seed-stage venture capitalists, who may view it as a sign of unnecessary spending or a lack of clear roles within the company.

According to Kruze's analysis, the average salaries for founder executives are as follows: CEO, $132,000; CTO, $134,000; COO/Operations, $135,000; and Product/CPO, $149,000. While these figures may not be exceptionally high, especially in the context of the Bay Area's startup ecosystem, they do provide a valuable benchmark for founders and early-stage investors.

In addition to founder salaries, Kruze's data also reveals the average starting salaries for initial hires in various roles. For instance, very senior engineers in the Bay Area can command salaries ranging from $180,000 to $235,000, while entry-level engineers in San Francisco typically earn between $75,000 and $105,000. Mid-level engineers, sales professionals, product managers, and marketing experts also have distinct salary ranges, depending on their location.

It's also worth noting that founders tend to give themselves significant raises with each subsequent funding round. According to Kruze, the average pay for founder executives increases to $183,000 after the Series A round and reaches $218,000 by the Series B round.

Beyond salary, equity is another critical component of startup compensation. Data from Carta, covering over 8,000 initial grants, provides insight into the equity stakes typically offered to the first five hires. The median equity ranges for these early employees are as follows: 1.49% for the first hire, 0.85% for the second, 0.50% for the third, 0.44% for the fourth, and 0.34% for the fifth.

Overall, Kruze Consulting's analysis offers a valuable resource for founders, investors, and early-stage employees seeking to understand the compensation landscape for seed-stage startups. By providing a data-driven perspective on salaries and equity, this research can help inform critical decisions and ensure that startups are adequately equipped to attract and retain top talent in an increasingly competitive market.

As the startup ecosystem continues to evolve, the importance of fair and competitive compensation packages will only continue to grow. By understanding the nuances of seed-stage salaries and equity, founders and investors can better position themselves for success and drive innovation in the years to come.