How to pay for a start-up team: balance immediate and long-term interests

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The salary and treatment of the members of the start-up team seems to be a sensitive topic all along. One argument is that since entrepreneurship should bear the risk of early earnings, the other is that salary bonuses should not be a development priority. Friends with questions can look at this article from Sterling Silver students who are on their way to business.

To talk about the treatment of entrepreneurs, we must first make two things clear. First, are you the founder or co-founder of this initiative? If so, it is generally more likely to trust long-term returns and be willing to accept short-term low pay. For example, my partner and I said that the basic cost of living is good, when the situation is urgent not to take money or even pay the money.

Second, are you the first group to join the start-up team or the 第二、三、四、五? The sooner the time to join (because the company is out of capital), the lower the usual salary, but can get more options, or lower line price. The equivalent of personal risk in exchange for long-term returns.

I've been asking entrepreneurs around before and I've heard all kinds of claims about starting salaries. Some people say that at the beginning of the first only to get the previous 70%, others say 70% are too high, 50% is almost, and some people say that the treatment can not be unworthy of the brothers-but also only medium-sized companies in the medium level.

(This will probably be backbone by others, feel the capitalist heart is really dark)

To put it another way, if you like the project, the team also get along, the management is very friendly, the task of reasonable authorization, good working atmosphere/environment good/development prospects, and finally have the first-line large companies pay, this is simply an invoice scraping 10,000 yuan perfect ending. If I could get to this state, I'd quit my job.

The so-called entrepreneurship, must bear three kinds of risks. The risk of capital is usually digested by venture capitalists; individual brand risks are usually digested by the founders; These risks are, of course, rewarding-if the business goes well.

Take the income example, the initial team full option is basically the guild. If the business is smooth, I think the more reasonable option return is "normal salary 1-3 times", equivalent to you think you value a monthly salary of 10K, joined the entrepreneurial team 2 years, then the option income in 24.72 million more psychological balance, or do not consider the listing or high-priced acquisition, such as abnormal good end of the situation. The risk associated with this return is the initial stage of the "normal salary 50%-70%".

To be complete, the above pay cut should first look at your original income. For example, before only 5k, not only not high or even low, then there is no need for a pay cut. But if the previous 20k, just started to start a business, can not afford to burn, do not pay the cost of human resources quickly sank the ship. Everyone hugged and drowned.

Suddenly want to write this topic, because in the team process, there are two very good conditions of the big company friends, the expected value is 20.3 million annual salary. These two friends are very capable and I believe they are worth it in a big company. However, my reply and suggestion is that they can try to start their own business, rather than join other people to launch the team. If the project is their own lead to do, with confidence and expectations, it is easier to cut their own income to control costs, the extension of the first financing of the use of time.

If you're teaming up with a big company, even a team of seven or eight people, the human cost of a year will also soar to more than 2 million (+ Four gold), plus other costs, burn at least 3 million a year, 18-month cost budget is 5 million-frankly, according to the current market, I am afraid it is difficult to talk about this angel investment. And VC also hard to trust you, feel the trend of hedonism, things still novices money is rushing, not like a start-up.

What does entrepreneurship look like? I think at least one thing is to believe that the rewards are in the future, not the present. The present sacrifice will return several times in the future. Moreover, the sacrifice is only temporary, such as 6-18 months to get a round of financing, usually 20 million or 30 million yuan, full pay can be recalled to normal levels. Then calculate the option, found that the empty cheque has been worth hundreds of thousands of, and with the B-round, C-round company valuation doubled and constantly appreciate.

At the beginning, the business is very thin. The prospect of a risk exchange is almost a law. There is no extra benefit without taking risks, but the usual last basket of hard pay. Stability, good pay, beautiful environment, these are the advantages of large companies-entrepreneurship is completely opposite. It is closer to the great adventure of the Pirate Hunt, and the probability of losing is far greater than the probability of winning. Maybe that's why we want to Hanlaobaoshou, but it's not the entrepreneurial mindset or the cost that the start-up team can afford.

So when I talk to my friends, the most I talk about is the project itself. You can ask me more questions about the product, and I will answer it patiently. The motivation to join this start-up team is your desire for entrepreneurship, trust in me and quake, and more importantly, the feasibility assessment of the project itself. I hope that after weighing the various risk factors carefully, you will find the probability of the road going through is higher and it is also a more enjoyable journey. Naturally, "faith" also means that you value the future more than the present.

Today I talked to a friend who contacted me about salary on the phone. The number I can accept is a little lower than her previous salary, but it's not much lower than 1k, but it's a lot less than the year-end award. I explained that, after 6-18 months to get a round, the bonus is not a problem, we can not get a round we hung up ...

What's more important than a blank cheque-style vision is whether the entrepreneurial experience you've been longing for is worth accepting a short-term salary cut. To be honest, the entrepreneurial success is too little, failure too much. I really hate to draw "options/financing/listing/Getting Rich" pie. For example, I chose to start my own business, I voted hundreds of thousands of in, the salary is not enough before the 1/3. Do I have the confidence to win? Of course not, I just particularly want to pursue a happy life of entrepreneurial experience, free to do what I like. Yes, "freedom" is almost the only advantage of startups. In the magnificent large companies were "tied" for a long time to understand the value of freedom. How much risk are you willing to take for the journey itself, and how much will you pay?

A few days ago, an old friend told me that high pay is actually a shackle. His salary is higher than mine, and the salary is hard to come by when he goes up, and his income is less than before. But this also limits your choice, must make more money, must be higher and higher, must be ...

is making more money the most important thing in your life?

I must say that most people will give a negative answer. But to think is one thing, to make a choice is another. So the high salary is indeed a yoke, let your career choice more and more narrow, more tangled.

In this case, it must be clarified that late-night talk is not for the sake of underpricing. My sincere advice to my friends who are expecting a 20.3 million annual salary is to start their own business, or join another mature one, who may have already got the B-round entrepreneurial team. The latter is likely to make salaries comparable to that of large companies, at the expense of fewer options, higher line weights and a loss of opportunity to nurture a product from scratch. The first 5 start-up members will decide the temperament, fate and team culture of the product, and this kind of biological parenting happiness may not be valued by everyone, even if the value may not be worth the risk. But it is precisely the special value of "biological" people, in order to experience the most exciting entrepreneurial journey. Take the product I am doing, for example, from the 20th after joining the partner is equivalent to "tour group." You know the difference between a regiment and a self-help tour.

No conclusion, I just have a feeling in the middle of the night. A foreign technology blogger once wrote: "Why do you like to start a business? Because we are a bunch of stupid pirates. "When I saw this, I had the throbbing of a stone in my chest," he said.