In the Bay Area, VCs expect and want the founder/CEO to make approximately $150K to $175K per year after the VC round (i.e. Seies A). I have confirmed this by asking VC panels here in Orange County during open-mike sessions.
What should be clearly understood is that you are actually financing a part of that compensation via your significant equity dilution that would result from the new vesting schedule put in place by the VC! You typically can't escape this new vesting if you want VC money...which is why PG's question about how much cash will you take to just walk away from it has real substance behind it.
As I said, rich is subjective. My last job paid just shy of your quoted salary and I would not consider that to be rich. Very well off, yes, but not rich. Rich, to me, is what you have behind you in your savings and investments, not what you have to look forward to in salary and the like.
I agree with everything else that you said though.
This seems useful, but I don't fully understand it. Are you saying that the VCs will force you to take a high salary, so that they can take a bigger chunk of your company?
No. They will not do that. No good VC would not force you to take a high salary if you would rather the money went into the business. They'd probably even like that. A founder should be setting the vision and culture of the company. Compensation is one piece of that culture. You set a precedent by taking a big salary and you set a message by taking a small one (i.e. Jet Blue - CEO, COO, CFO each have a base salary of $200,000 / turned down bonuses during bad years).
It's not a question of forcing. It's the norm. All other things being equal, why should someone take a lower salary?
And there are other factors. If your compensation becomes a benchmark for the rest of the team, now your company is in real trouble. You can't expect to hire key team members at less than the norm. It just won't happen. VCs know that.
Also, a VC's main job is to put out as much of their committed capital as possible into good deals. Allocating a large part of a preferred equity tranche to fund the maintenance and creation of a solid team is the right thing to do.
You are right of course; I am somewhat hesitant to provide more details about it here. Judging from the handful of emails I have received, this is a good way to get the word out, and the real discussions can take place offline.
Mukund and Leonidas, I have a reasonable understanding of programming; I designed and helped build a significant part of the code. I did not mean to appear as if I have no knowledge of, or desire to, learn code. But the opportunity I am talking about is to complete the transformation of the current app at hyper speed, so that we can fill the need right now, not in 12 months or longer. Surely, if the demand is as great as I am saying, someone will fill the gap very soon.
hey dont take it seriously, i was just kidding on the programming part. I was giving what worst could happen. So if you have built and designed things then its better. We dont know what you are so we just assumed you to be like another manager guy
Thanks for the suggestion; I am trying to avoid this path, as my best case outcome is that I will be an ok programmer - and that's not good enough to succeed. To win today, you have to have a real team.
Well if you dont get good on tech side, you will see a dangerous thing creeping behind you bwahahahhaha (yeah u will hear that laugh this way) and this dreaded thing is losing your independence and become a puppet in the hands of your coder partners ;-) (just kidding), but think on these lines too, what will happen if those 2 woz tie u up for ransom? :D
That's why I am looking for great hackers, as opposed to good hackers. Great hackers know that the value of the group is greater than the sum of its parts ;-)
Great hackers know that they can build anything; what they don't know is what they should be building. My problem is the opposite. I know what to build because I have customers who are clamoring for it, but I don't have the right people to build it.
Your skills: Database guru, VB6 tinkerer (not a typo!), browser-to-hardware connectivity hacker, RoR lover.
One co-founder can complement the other, so you don't have to have all the skills.
My background: 10 years in ecommerce at founder/ceo level. Have developed a working app by hiring coders, and even have paying customers, but ran out of money and went back to investment banking. But the entrepreneural bug bites, and bites real bad. Meanwhile, the app continues to run and generate revenue. A month ago, I came across PG's writings and this forum, and now I am convinced that I was doing it wrong - instead of paying unmotivated coders, I should have brought on two hackers as my partners and co-founders.
Ideally, you should be based in Orange County CA where I am, so we can fully develop the core system in the next few months. We will then apply to YC's fall program, so you must be willing to move to the Bay Area.
While I am confident that YC will accept us (PG's Viaweb experience will create tremendous leverage), there are two other routes we can take - apply for Charles River's $100k-$250K program, or completely bootstrap this and not seek any outside capital.
Your equity is fully negotiable. If you are a true hacker, I need you and you need me. This Steve Jobs is seeking two Wozniaks!
Send me your background info to: me.jobs.r.u.woz at gee male dott comm.
The user-facing part of the system is currently a VB client app. It's horrendous, but guess what - users love it because it meshes with the rest of their work environment, which is hardware devices connected to their PCs as well as other VB apps. The reason I would like at least one of my co-founders to know VB well is that when migrating this app to a web based equivalent, we want to preserve the essence of what is working. That delicate transplant surgery can be successful only when the team is well versed in web technologies as well as VB.
