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Justin Hibbard
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March 30, 2005

What's $50,000 between CEOs?

Sarah Lacy

Start-up CEOs can have it rough. Long hours, stress, demanding shareholders, and as Deal Flow blogged about here, even marital problems. But don't feel too bad for 'em. A VentureOne study released today found that CEOs and founders of venture-backed companies make $200,000 a year on average. Not exactly the entrepreneur of old who had to take out a second mortgage to meet payroll, is it?

CEOs who replace the founders actually make about $50,000 more, but get about half the 9% equity stakes that founders get. The median total compensation was $252,000; a bit higher than six months ago, but roughly flat since early 2003. That seems to reflect the stabilization in the venture world in general over that time. If reports that venture activity has picked up in the last three months can be trusted, and competition for good CEOs intensifies, a raise for the startupís top job might not be far off.

Those lower down the totem poll may not be as lucky. The study says software engineers earned $80,000 on average, down from $85,000 six months ago. And scientists at health-care companies also saw compensation drop from $79,000 to $70,000.

Interestingly, CEOs in healthcare enjoy base salaries some $30,000 higher than IT counterparts. It reminded me of several recent conversations with lifesciences VCs who've been fretting over where they can find some good, experienced lifesciences managers. Since lifesciences companies have come in and out of fashion in the valley, biotech is a younger industry, and the companies take so much longer to mature, it's a good deal harder to find the serial entrepreneurs VCs are so enamored of.

Of course, all of this ignores where the big money can come from-- the stock options. Even after the crash, everyone who takes a startup job is hoping he or she works for the next Google. Itís the sometimes irrational hope that makes the valley go round.

08:21 PM


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