Startup employees are usually paid below market rate and given equity to make up the difference. Salary sites such as Payscale and ZipRecruiter publish startup averages, and they differ by tens of thousands of dollars depending on role and location. Below is how pay varies by role, what founders and executives typically earn, and what to negotiate.
Working at a startup can be an exciting and rewarding experience. Startups give you the chance to pursue your passions while building a team of smart, passionate colleagues.
However motivating a job at a startup may be, though, people still need to put food on the table. Not paying employees adequate compensation is one of the most costly startup mistakes. So what should you know about startup salary and compensation?
What is a reasonable startup salary?
Working for a startup almost always involves taking a salary cut, i.e. being paid lower than market rate. However, startup employees expect to receive other forms of compensation—usually equity in the company—with the hope that these will make up for the lost wages in the long run.
Payscale publishes an average salary for startup employees that spans a wide range, from well under six figures to the high six figures for senior roles. ZipRecruiter gives a somewhat lower startup annual salary estimate. Both change often, so check the current numbers before you anchor on one.
Of course, these general startup salary figures aren’t as helpful as data for specific job titles. From project management to accounting, startups need a diversity of skill sets to succeed. Payscale’s estimates for a few roles, in rough terms:
- Software engineering: typically low six figures
- User experience design: typically in the five figures to low six figures
- Sales director: typically in the five figures to low six figures, with a wide range
- Product manager: typically low six figures
In addition to full-time positions, startups also need to fairly compensate startup interns. Intern startup salaries are usually somewhat lower than permanent jobs. Whether an intern must be paid minimum wage depends on federal and state rules about the purpose of the internship and who benefits from it, so confirm with counsel before setting pay.
How do startups get paid?
The question of startup salary and compensation is more challenging because most startups are constantly looking for new funding. Startups that are in the “seed stage” receive capital from a few investors, who exchange their money for an equity stake in the company.
This seed money is used to support the business and pay employees until the company can generate its own cash flow. Seed funding is then followed by multiple larger rounds of venture capital financing, which are named according to their order: Series A, Series B, Series C, etc.
Much of this funding is passed down to the company’s employees, who are typically given both startup salary and equity. In addition to their annual base salary, employees are also given stock options when they sign on.
Stock options give the owner the right to buy the company’s shares at a fixed price. Employees with equity hope that the stock price will rise above this initial price (also called a “grant price” or “exercise price”), which lets them sell their shares and make a profit.
In addition, stock options typically come with a vesting schedule to encourage workers to stay with the company. This means that some shares “vest” (i.e. become available for purchase) sooner than others.
For example, a vesting schedule may be four years long, with shares becoming available gradually, often monthly or yearly. Many schedules also include a one-year “cliff,” the minimum period an employee must work before any shares vest. At the cliff, the first 25 percent vests at once, and the rest follows on the regular schedule.
Do startup founders get a salary?
As the leaders of the company, early-stage startup founders may or may not choose to draw a salary, in addition to their equity stake. This decision depends on various factors, such as the company’s financial health and the founders’ ability to self-finance.
It’s hard to give a one-size-fits-all answer here, since startups range from massive operations to tiny two-person passion projects. However, there are still a few data points that offer a clearer picture into startup CEO salary, which varies with stage and funding.
According to estimates by 80,000 Hours, for example, startup founders in Y Combinator have tended to pay themselves modest salaries, well under the market rate. Meanwhile, the accounting firm Kruze Consulting puts the average CEO salary in its 2026 startup CEO salary report at $153,000 at seed and $203,000 at Series A, so pay rises with the amount of financing raised.
Other founding roles, such as the chief operating officer (COO) and chief technical officer (CTO), may also receive a startup salary. ZipRecruiter publishes averages for the startup CTO salary and the startup COO salary; both typically land in the low six figures.
How to negotiate salary at a startup?
Despite the expectations of lower wages, there’s usually room for startup salary negotiation when joining the company. If you want to negotiate your startup salary, here are a few things to keep in mind:
- Cost of living: Many startup headquarters are in areas with high costs of living. This is especially true of tech companies—think Silicon Valley, New York, or London. If you’ll be living in or relocating to one such location, you have a good reason to push for a salary bump.
- Years of experience: Even with lower salaries across the board, startups still value employees with valuable backgrounds. If you bring many years of experience or specialized knowledge to the table, note these factors during the negotiation.
- Salary increases: While you might be willing to take a pay cut initially, your startup salary should rise as the company earns more funding from investors. Make sure you work out an agreement for how your salary will increase over time.
- Equity: In exchange for lower salary, you may decide to accept a greater equity stake in the startup. Of course, any such decision should be weighed against your financial situation and your honest belief that the company has the chance to make a big exit.
- Alternate compensation: If your bosses won’t budge on salary, you can still push for other startup compensation. Startups are often more flexible with perks such as job title or extra vacation time. For example, joining a startup might be the career move you need to go from “Software Engineer” to “Senior Software Engineer.”
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Frequently asked questions
What is a reasonable startup salary?
Startups usually pay less than market rate and offset it with equity. Payscale and ZipRecruiter publish different averages, so title and role matter more than any overall figure.
Do startup founders get a salary?
It depends on the company's finances and whether the founders can self-finance. Y Combinator founders tend to pay themselves well under the market rate, and Kruze Consulting's 2026 startup CEO salary report shows pay rising with the amount raised, from an average of $153,000 at seed to $203,000 at Series A.
How do you negotiate a salary at a startup?
Point to cost of living, years of experience, and a plan for raises as funding grows. You can also trade salary for a larger equity stake or ask for perks such as a better title or extra vacation.
How does startup stock option vesting work?
Options give you the right to buy shares at a fixed grant price, and vesting decides when you can. A common schedule runs four years with a one-year cliff, after which the first 25 percent vests and the rest follows on a regular schedule.
