Founder compensation is among the most sensitive—and misunderstood—topics in the startup world.
As recent data from the Pilot Founder Salary Report 2025 and other leading sources reveal, the era of “growth at all costs” has given way to a new focus on capital efficiency, profitability, and founder frugality.
Here’s how the reality of founder pay is shifting and what startup leaders need to know to make informed, sustainable decisions.
2025 Snapshot: Founder Salaries Sink Amid Changing Markets
The past year marked a dramatic turning point for founder salaries. Data from Pilot’s 2025 report, based on responses from 1,844 founders, highlights a 43% drop in founder compensation compared to the previous year, with the average founder salary at $98,000 and the median at $75,000. Nearly 5.4% of founders pay themselves nothing, which though sobering, is an improvement over the previous year’s 9%.
A surge in AI startups and a rise in bootstrapped companies contributed to these changing averages. Whereas last year 14% of founders ran AI startups, this year that figure is 40%—and AI founders pay themselves about 20% more than non-AI peers. Still, even AI founders have trimmed their salaries to meet the realities of today's market.
How Do Founders Decide Compensation?
Most founders base their pay on “what the startup can afford,” followed by a loose approximation of market rate or by drawing only as needed. A small number reference outside salary reports or board/investor guidance. In practice, founders who define their pay as “market rate” earn about 79% more than those who simply take what’s available.
Benchmarks by Stage: What’s ‘Normal’ Compensation Now?
Recent data and expert consensus yield the following guidance by funding stage and company maturity:
Industry and region also play a major role. For example, founders in biotech or high-cost cities (like SF or NYC) generally command higher salaries due to opportunity cost and local expenses, while those in lower-cost regions or less capital-intensive sectors (e.g., consumer products) earn less.
More Than Just a Paycheck: Equity and Alternative Structures
Salary is one part of the equation. The majority of a founder’s long-term financial upside comes from equity, not annual paychecks. Typical equity stakes for founding CEOs range from 10–30%, with vesting schedules to protect both founder and company interests.
Other common compensation strategies include:
Deferred Salary: Some founders accrue (but don’t take) full pay until company finances improve.
Milestone Bonuses: Bonuses upon reaching key revenue or funding goals.
Profit Distributions: Especially in profitable or bootstrapped companies, some founders opt for quarterly payouts instead of high base salaries.
Hybrid Models: A blend of modest salary plus milestone-based incentives or profit share, allowing maximum flexibility as the company grows.
Key Drivers of Founder Compensation
Founders should calibrate their pay with attention to:
Company Runway and Funding: More capital equals more flexibility, but investor expectations usually cap salaries below market rate until Series B and beyond.
Location & Cost of Living: Higher in major tech hubs; lower elsewhere.
Role and Skill Sets: Technical founders and those in specialized fields (like biotech or AI) tend to earn more.
Company Stage & Size: Later-stage or larger startups support higher pay, while pre-revenue companies should emphasize survival and minimal draw.
Personal Circumstances: Family obligations or personal savings may rightfully influence a founder’s minimum viable salary.
What Do Investors Want?
Investors generally support reasonable founder pay—not zero, not extravagant. Their expectation: salaries below market, transparent, performance-tied, and stage-appropriate. Salaries deemed “too high” (relative to company stage or peer benchmarks) can hurt funding prospects; ultra-low or no salary can raise burnout and focus concerns.
Regional Insights: The US Startup Pay Divide
The 2025 Pilot survey reveals significant regional salary variation:
San Francisco Bay Area: Lower than NYC or Boston; 45% pay themselves <$100K, 28% $150K+.
New York City: 48% under $100K, but average salary 34% higher than SF.
Boston: Most extreme disparity; 49% < $100K, 30% $150K+.
Texas & Elsewhere: Much lower overall, reflecting cost-of-living.
Guiding Principles for Founders Setting Compensation
Cover basic living expenses, but minimize burn: Remove personal financial distractions, but keep most cash focused on company growth.
Revisit salary as the company matures: Ratchet up compensation after new funding, major milestones, or reaching profitability.
Tie increases to measurable company success: Align salary bumps with revenue, funding, or customer growth milestones.
Prioritize transparency with your board and investors: Document rationale, get approval, and communicate any major compensation changes.
Remember, equity is king: Long-term wealth is built on your cap table, not your salary check.
In a year defined by declining venture capital, rising bootstrapping, and the AI gold rush, founder compensation in 2025 has grown more varied and more scrutinized than ever before. The “right” salary covers your needs, aligns with company stage, and earns the trust of your backers—leaving you free to build, lead, and grow.
About Rollfi
Rollfi empowers banks, vertical SaaS platforms, accounting firms, and fintechs to add payroll and benefits to their offerings through white-label solutions and robust APIs. With Rollfi’s infrastructure, platforms can unlock new revenue, boost customer retention, and gain valuable payroll data insights. Fast deployment and full regulatory coverage make Rollfi the easiest way to turn your platform into a one-stop shop for essential business services.
Founder compensation is among the most sensitive—and misunderstood—topics in the startup world.
As recent data from the Pilot Founder Salary Report 2025 and other leading sources reveal, the era of “growth at all costs” has given way to a new focus on capital efficiency, profitability, and founder frugality.
Here’s how the reality of founder pay is shifting and what startup leaders need to know to make informed, sustainable decisions.
2025 Snapshot: Founder Salaries Sink Amid Changing Markets
The past year marked a dramatic turning point for founder salaries. Data from Pilot’s 2025 report, based on responses from 1,844 founders, highlights a 43% drop in founder compensation compared to the previous year, with the average founder salary at $98,000 and the median at $75,000. Nearly 5.4% of founders pay themselves nothing, which though sobering, is an improvement over the previous year’s 9%.
A surge in AI startups and a rise in bootstrapped companies contributed to these changing averages. Whereas last year 14% of founders ran AI startups, this year that figure is 40%—and AI founders pay themselves about 20% more than non-AI peers. Still, even AI founders have trimmed their salaries to meet the realities of today's market.
How Do Founders Decide Compensation?
Most founders base their pay on “what the startup can afford,” followed by a loose approximation of market rate or by drawing only as needed. A small number reference outside salary reports or board/investor guidance. In practice, founders who define their pay as “market rate” earn about 79% more than those who simply take what’s available.
Benchmarks by Stage: What’s ‘Normal’ Compensation Now?
Recent data and expert consensus yield the following guidance by funding stage and company maturity:
Industry and region also play a major role. For example, founders in biotech or high-cost cities (like SF or NYC) generally command higher salaries due to opportunity cost and local expenses, while those in lower-cost regions or less capital-intensive sectors (e.g., consumer products) earn less.
More Than Just a Paycheck: Equity and Alternative Structures
Salary is one part of the equation. The majority of a founder’s long-term financial upside comes from equity, not annual paychecks. Typical equity stakes for founding CEOs range from 10–30%, with vesting schedules to protect both founder and company interests.
Other common compensation strategies include:
Deferred Salary: Some founders accrue (but don’t take) full pay until company finances improve.
Milestone Bonuses: Bonuses upon reaching key revenue or funding goals.
Profit Distributions: Especially in profitable or bootstrapped companies, some founders opt for quarterly payouts instead of high base salaries.
Hybrid Models: A blend of modest salary plus milestone-based incentives or profit share, allowing maximum flexibility as the company grows.
Key Drivers of Founder Compensation
Founders should calibrate their pay with attention to:
Company Runway and Funding: More capital equals more flexibility, but investor expectations usually cap salaries below market rate until Series B and beyond.
Location & Cost of Living: Higher in major tech hubs; lower elsewhere.
Role and Skill Sets: Technical founders and those in specialized fields (like biotech or AI) tend to earn more.
Company Stage & Size: Later-stage or larger startups support higher pay, while pre-revenue companies should emphasize survival and minimal draw.
Personal Circumstances: Family obligations or personal savings may rightfully influence a founder’s minimum viable salary.
What Do Investors Want?
Investors generally support reasonable founder pay—not zero, not extravagant. Their expectation: salaries below market, transparent, performance-tied, and stage-appropriate. Salaries deemed “too high” (relative to company stage or peer benchmarks) can hurt funding prospects; ultra-low or no salary can raise burnout and focus concerns.
Regional Insights: The US Startup Pay Divide
The 2025 Pilot survey reveals significant regional salary variation:
San Francisco Bay Area: Lower than NYC or Boston; 45% pay themselves <$100K, 28% $150K+.
New York City: 48% under $100K, but average salary 34% higher than SF.
Boston: Most extreme disparity; 49% < $100K, 30% $150K+.
Texas & Elsewhere: Much lower overall, reflecting cost-of-living.
Guiding Principles for Founders Setting Compensation
Cover basic living expenses, but minimize burn: Remove personal financial distractions, but keep most cash focused on company growth.
Revisit salary as the company matures: Ratchet up compensation after new funding, major milestones, or reaching profitability.
Tie increases to measurable company success: Align salary bumps with revenue, funding, or customer growth milestones.
Prioritize transparency with your board and investors: Document rationale, get approval, and communicate any major compensation changes.
Remember, equity is king: Long-term wealth is built on your cap table, not your salary check.
In a year defined by declining venture capital, rising bootstrapping, and the AI gold rush, founder compensation in 2025 has grown more varied and more scrutinized than ever before. The “right” salary covers your needs, aligns with company stage, and earns the trust of your backers—leaving you free to build, lead, and grow.
About Rollfi
Rollfi empowers banks, vertical SaaS platforms, accounting firms, and fintechs to add payroll and benefits to their offerings through white-label solutions and robust APIs. With Rollfi’s infrastructure, platforms can unlock new revenue, boost customer retention, and gain valuable payroll data insights. Fast deployment and full regulatory coverage make Rollfi the easiest way to turn your platform into a one-stop shop for essential business services.