This is about the 2024 Kruze Consulting report on salaries for startup CEOs – defined as pay rates for U.S.- based companies that have raised less than $125MM. The entire report, which includes the “Startup CEO Salary Calculator” is available here.
Early-Stage CEOs and their Boards often have a hard time knowing “what’s right” as far as CEO comp is concerned. To be sure, no CEO takes the job for the money. But still, it’s good to know what the “ballpark” is – if only so you can tell Auntie Esther at Thanksgiving that “no CEO in Early Stage earns a lot of money.”
The Kruze study is the longest running (7 years) and largest startup CEO salary report. Unlike a “salary survey,” where data can be “embellished” by the participants, this study is based on anonymized payroll data. Over 450 startups are in this analysis – from SaaS to biotech startups to AI businesses.
Early-stage salaries remain very low versus the corporate world – and first-year graduates from Harvard Law School. The average startup CEO salary in 2024 was $141,000, down slightly from 2023’s $142,000. This decrease is probably not statistically significant. In fact, you could throw a hat over all these numbers. Salaries have increased only about 1.4%/year – a total of 8% since 2018. Kruze points out that follow-on fundraising has been difficult and that CEOs may have cut salaries, including their own, to keep their companies afloat. As perspective, the average Seed CEO salary increased slightly from $129,000 to $132,000 whereas Series B CEO salaries decreased from $251,000 to $227,000. There has been very little change in average salaries over the last six years, although median salaries are trending upward; median is the point at which half the numbers are above and half are below median salaries, and this inched up by 1.4% from $145,000 in 2023 to $147,000 in 2024.
STARTUP CEO SALARY TRENDS
Source: Kruze Consulting 2024 Startup CEO Salary Report
Adjusted for inflation, salaries have actually declined over this period. The average salary of $130,000 in 2018 would be $164,000 today – considerably more than the $141,000 in Kruze’s 2024 survey.
Fewer CEOs and founders are paid less than $100,000 or more than $250,000. Kruze believes the reduced number below $100,000 is because of the number of startups that have recently gone out of business. Only 13% of startups where the CEO drew a $0 salary in 2023 are still in operation in 2024.
DISTRIBUTION OF CEO STARTUP PAY
Source: Kruze Consulting 2024 Startup CEO Salary Report
Salaries for later stage financings are also flat (and declining in real terms).
CEO STARTUP AVERAGE PAY BY STAGE OF FUNDING
Source: Kruze Consulting 2024 Startup CEO Salary Report
Obviously, angel investors want their portfolio CEOs to be motivated and adequately compensated so they can make the company a success. But since the average investment per company by each ACA angel group is only about a quarter million dollars, investors would like to see that their investments are used to support the growth and not just one or two executive salaries. So over-compensated CEOs are a deterrent to attracting additional capital.
The Kruze Report has more detail –including some data on CTOs and some data on why women CEOs continue to be paid less than men. Please check it out.
KEY TAKEAWAYS
- Startup Salaries are largely flat in nominal terms across Seed, Series A and Series B
- Adjusting for inflation, they are declining
- Boards should manage compensation to be in line with market
AUTHOR: John Lilly, Lateral Capital Management LLC / Lateral Capital Advisors LLC, Managing Member
