Of all the startup roles—content strategists, controllers, COOs, and more—the job of COO (chief operating officer) is perhaps one of the most underappreciated yet valuable. The role of the COO is to oversee and manage the company’s critical operational functions and keep everything running smoothly from day to day.
Given this essential task, COOs deserve to be compensated fairly for their hard work. But what is the average COO (chief operating officer) salary, and how much does a COO at a startup get paid, exactly? In this article, we’ll discuss what a startup COO salary entails and equity options, so that you can recruit and retain high-quality talent.The role of the COO in a startup may vary depending on the company’s immediate and long-term needs. Click To Tweet
What does a COO do at a startup?
The COO reports directly to the CEO, and is often considered to be the company’s “second in command.” COOs focus on carrying out the details of the company’s business plan and strategy.
Often, the COO handles the internal affairs of the business, while the CEO acts as its public-facing representative. For example, if the company receives negative press, the CEO might decide which corrective actions to take and make a public announcement. The COO is then tasked with hiring and managing the right personnel to make the CEO’s promises happen. That can include customer support, DevOps engineers, or digital marketers.
COOs usually have previous experience in fields such as sales, marketing, product management, and business development. The former titles held by COOs may include: director of customer success, marketing coordinator, marketing manager, sales director, associate product manager, sales operations manager, Salesforce administrator, etc.
In addition, COOs should have a solid education, with many holding a graduate degree such as an MBA. Finally, COOs should possess strong leadership, communication, and analytical skills to help them fulfill their job responsibilities.
COOs are expected to wear many hats in order to successfully complete administrative functions across the business. As such, COOs oversee a wide range of employees: QA managers, recruiters, sales managers, customer support reps, engineering managers, event planners, HR directors, sales engineers, sales reps, and more.
The role of the COO in a startup may vary depending on the company’s immediate and long-term needs. Some COOs are hired to complement the CEO’s abilities—such as a forward-thinking, visionary CEO who needs a practical-minded second in command. Other COOs are brought on for a specific initiative, such as launching a new product or expanding into a new market.According to ZipRecruiter, the average startup COO salary in the United States is more than $122,000 a year. Click To Tweet
How much does a COO of a small company make?
The salary for a COO at a startup depends on multiple factors, so it’s difficult to give a “one size fits all” answer. The elements that may influence startup COO salary include:
- Years of experience: Seasoned COOs can likely command a higher salary than people who are stepping into the role for the first time.
- Cost of living: COOs located in high cost of living areas (Silicon Valley, New York, London, etc.) will need a higher salary as compensation.
- Funding: Late-stage startups have more cash to spend than early-stage startups, which means they can pay higher salaries.
- Equity: As we’ll discuss later, COOs may choose to draw a lower salary in exchange for a higher equity stake in the business.
According to ZipRecruiter, the average startup COO salary in the United States is more than $122,000 a year. However, there’s a good deal of variability behind this figure. COO salaries at the 25th percentile were $69,000. They were $159,000 at the 75th percentile and $216,000 at the 90th percentile.
Looking across the pond, the startup journalism website Sifted has compiled a survey of COO salaries in the United Kingdom. Non-co-founder COOs at seed-stage startups earn an average salary of £94,500 ($128,000 USD as of writing). Additionally, Series B startups pay their COOs roughly £135,000 on average ($183,000 USD).
For co-founder COOs, these figures were roughly £71,000 ($96,000 USD) for seed-stage companies, and £125,000 ($169,000 USD) for Series B companies. (Co-founders likely choose to draw a lower salary because they have compensation in the form of equity.) Other factors influencing startup COO salary, according to Sifted, include the number of employees and the COO’s level of experience.
These salary numbers are in line with other startup executive roles, such as the CEO (chief executive officer) and CTO (chief technology officer). Executive compensation is just one factor that goes into a startup salary. As the business grows, you’ll also need to hire financial analysts, senior marketing managers, data scientists, database engineers, sales managers, sales representatives, and much more. For more information, check out our complete guide to startup salaries.In exchange for a lower salary, some COOs accept a larger percentage of equity. Click To Tweet
How much equity does a COO get in a startup?
Of course, salary isn’t the only form of startup compensation that COOs receive. In exchange for a lower salary, some COOs accept a larger percentage of equity. Ideally, this would pay off when the company is acquired or goes public.
This raises the question: how much should a COO equity grant be? Non-co-founder COOs (i.e. those hired at a later date) typically receive between 1 percent and 5 percent in business equity. Higher equity percentages are usually reserved for COOs who bring a lot to the table. For example, this would include well-connected figures in the startup community who can help raise capital for the business.
Non-co-founder COO equity stakes usually vest over a period of several years, i.e. COOs receive a set portion of the stake each year they work for the startup. This is to protect the business if the COO isn’t a good fit and departs early. It also serves to reward good COOs who stay with the business for a long time.