Me (Founder A): Technical founder. I started the company originally. I live in a very high-cost-of-living (HCOL) city. I have unavoidable fixed costs (debt + family) and literally cannot work on the startup unless I draw a salary to cover these. I am aiming for slightly higher than the median market rate for a Senior SWE in my city. It is high in absolute terms because the city is expensive, but it is the minimum I need to not take a corporate job (which I am actively interviewing for as a Plan B).
Co-founder (Founder B): Non-technical. Angel invested first, joined as co-founder later. Financially secure (previous exit). Lives in a Medium Cost of Living (MCOL) city where market salaries are roughly 50% of mine. They do not need a salary to survive right now. They knew my financial situation, debt, and burn rate before they joined and before they invested his initial angel ticket. They knew the company would need to support me while they worked for free. We operated this way successfully for the past year using angel funds.
We are hitting a wall regarding founder compensation that threatens to kill the company. We are looking for a salary solution until we can raise a seed round which is not too far away.
My Position (Survival): In pre-seed, salary is a burn-rate constraint. I take the minimum viable amount I need to work. They take €0 because they can afford to. This maximizes runway. Since they own 50%, keeping the burn low is the best way to protect their equity. If I don't take this salary, I have to take a job, and the company dies.
His Position (Fairness): They argue that since I am taking a "market-level" salary, I am effectively extracting value while they subsidize me. They are demanding that to be "fair," we must either:
1. Pay them a proportional market salary (drastically shortens runway).
2. Or give them more equity to compensate for the salary asymmetry. (destroys equity balance)
My Questions:
1. Is it reasonable for a Technical Founder to take a Median HCOL salary (due to strict financial constraints) while the Non-technical Founder takes €0?
2. Does the "Fairness" argument (matching salaries) trump the "Runway" argument (survival) in early-stage startups?
3. Did they waive the right to claim "unfairness" by joining the partnership with full prior knowledge of this asymmetry?
wakeywakeywakey•2mo ago
To answer your questions more directly:
There is no "right" and "wrong" way. There is no "fair". It's whatever you can swing. You are partners, and if you want to keep it together you need to avoid building resentment, but it's also a business, and you need to bet on yourself. The "fairness" obsession is naive and it's exactly what slippery MBAs like to foist over devs who are zoomed in too much to value their time properly.What's stopping you from getting a job and doing this part-time on your own, retaining all equity?
throwawayround•2mo ago
Maybe the better question is this: is it ethically acceptable to expect him to take 0 salary until seed without additional compensation, given that this is the only way we can realistically reach a seed round? In my mindset if he doesn't do this sacrifice he already loses 100% of everything.