(1) Plenty of founders do get deferred comp. Like all other compensation issues, it's all about sales ability. You either sell your investors on getting money, or they sell you on keeping it.
(2) "There's never spare money" is a great argument for paying the CEO a sustenance wage. That never happens; the CEO walks in the door at 175-225k with a severance package and a founder's share of equity.
(3) "There's never enough revenue" is a great argument for running your business to break even or profit. If you can do that, you don't need VC. The question isn't whether to lose money, it's where to lose it.
(4) Get your accounting advice from an accountant, not a blog post.
I'm not advocating in favor of deferred comp, I'm just saying, anecdotally, I know the story not to be as simple as this post represents it. I don't think you should take VC at all.
Maybe we're talking about startups at different stages. I'm sure an angel-funded startup doesn't pay anyone 175k. But post- major-label A round? Yeah, I'm going to stand by my assertion. The VP/Sales may get that too, pre- varcomp.
I wish I could give you specific examples of founders I know got deferred comp; I can't, because it's none of my business to name names. The legend of deferred comp was not just pulled out of someone's ass. It's being blogged about because people ask for it, and people ask for it because some people have gotten it.
Again: don't take VC at all. Then this stuff doesn't matter.
It is par for the course for "seasoned" startup executives to get paid $175K+.
When you see a random website with $20M in funding, and you think "what do they do with $20M?" What they do with the $20M is overpay a bunch of serial startup execs.
I think this might be more common in the world of serial entrepreneurs putting together a team with their rolodex. Those guys are always "just looking for a developer." It's painful what they're usually willing to offer to the guy that they expect to develop all of the product.
For technical people doing their first startup it's pretty different. It almost seems like there should be different words for those two classes of businesses.
(2) "There's never spare money" is a great argument for paying the CEO a sustenance wage. That never happens; the CEO walks in the door at 175-225k with a severance package and a founder's share of equity.
(3) "There's never enough revenue" is a great argument for running your business to break even or profit. If you can do that, you don't need VC. The question isn't whether to lose money, it's where to lose it.
(4) Get your accounting advice from an accountant, not a blog post.
I'm not advocating in favor of deferred comp, I'm just saying, anecdotally, I know the story not to be as simple as this post represents it. I don't think you should take VC at all.