One of the biggest struggles for bootstrapped entrepreneurs is their own salary. During the first phase of the business, there is no cash so there is no salary. Then when revenue begins, it is spent on other people’s salaries. The last people to get paid as a startup gets off the ground are the entrepreneurs themselves.
To illustrate this, I share the first five years of my personal salary from my startup life:
- 2007 – $0 (we organized our company on June 15, 2007; we just celebrated our 7th anniversary)
- 2008 – $20k (I was paid $2500/mo starting in May of that year)
- 2009 – $30k (the $2500/mo continued)
- 2010 – $31.5k ($2500/mo until the last quarter; raised to $3000/mo)
- 2011 – $40k ($3000/mo until May; raised to $3500/mo)
It is a long slog to bootstrap your business. There are large opportunity costs and the risk is high. But the rewards can be great. And if it all fails, who cares? Will your life really be substantially better with a $100k salary instead of a $30k salary? You can choose to live happily under either condition.
Note that often the chase of investor dollars is more motivated by the desire to have a personal salary than the actual needs of the business. Self-introspection is valuable on that point as you consider fundraising options.
What do you pay yourself in your startup?
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