Navigating the financial landscape after securing a seed round can be a daunting task for any founder. With insights from experienced owners and CTOs, this article explores key strategies for determining self-compensation post-funding. Discover how to focus on long-term growth and conclude with strategies to start with a profit-based salary, among seven expert insights. Each perspective offers a unique approach to balancing personal financial needs with the company's growth objectives.

• Focus on Long-Term Growth
• Establish Founder-Market-Fit Salary
• Draw Up Two Budgets
• Prioritize Resources for Growth
• Balance Financial Needs and Growth
• Tie Motivation to Business Success
• Start with Profit-Based Salary

Focus on Long-Term Growth

When deciding my compensation after a seed round, I approached it with a focus on long-term growth rather than immediate personal gain. For instance, having managed over $70M in annual revenues as a fractional CFO, I knew the importance of aligning salary with the company's financial health and strategy. So, I set my salary modestly to ensure that we could reinvest in key areas like developing AI solutions and enhancing client services, leading to an average growth of 22% in previous roles.

To give a specific example, in one of the startups I worked with, strategically leaning salaries allowed us to allocate more resources into developing data-analytics systems. This decision paid off, helping us optimize pricing strategies and improve cash flow, which ultimately increased efficiency and resulted in significant revenue growth.

I recommend startups tailor their compensation plans to fit their growth stage and financial forecasts. Implement robust forecasting and budgeting practices to balance immediate financial needs with strategic investments, enabling the potential for scalable success.

Russell Rosario, Owner, Russell Rosario

Establish Founder-Market-Fit Salary

As a digital marketing agency founder, my approach to post-seed compensation was deeply strategic. I started by establishing a founder-market-fit salary—one that was modest enough to extend our runway but sufficient to keep me focused entirely on scaling the business.

The formula I used was: Calculate 6–12 months of personal essential expenses (housing, healthcare, basic living costs), add a 20% buffer for unexpected costs, and use that as my baseline salary. This came to about 30% below my previous market rate, which felt like the right balance between financial security and company stewardship.

I also created clear salary-increase milestones tied to company performance metrics. For example, I would increase my compensation only after hitting specific monthly recurring revenue targets or client retention rates. This aligned my personal compensation growth with the company's success and helped me justify the decisions to investors.

Two key factors influenced this strategy:

Our burn-rate calculations showed we needed at least 18 months of runway

The ability to show investors we were prioritizing growth over founder comfort

This approach helped us maintain investor confidence while ensuring I could stay fully committed to growing the business. It also set a strong cultural precedent for fiscal responsibility as we began hiring our first employees.

Joey Lowery, Founder & Marketing Coach, Media Shark

Draw Up Two Budgets

Deciding how much to pay yourself at any point in running a business is difficult. Most people feel uncomfortable taking money for themselves.

After each seed round, I drew up two budgets. The first covered how much money the company would need to sustain its expenses for a certain amount of time, and grow within investor expectations. The second covered how much money I would need to dedicate myself to the company. Having these budgets helped me calculate how much of the seed-round funding could go to my salary.

Dan Brown, CEO & Founder, Textun

Prioritize Resources for Growth

I approached setting my salary after our seed round with a pragmatic mindset. Having previously sold over $10 million in payroll software, I understood the importance of aligning my compensation with the company's growth goals. I decided to pay myself modestly to prioritize resources for product development and enhancing our platform to ensure quicker and more flexible payment cycles for gig workers. 

My previous experience as the Chief Strategy Officer at Kairos taught me the value of strategic reinvestment. By maintaining a lean salary, we were able to allocate more funds toward building robust technology that truly empowered both businesses and gig workers, ultimately delivering a great experience that clients have come to expect from us. 

From a practical standpoint, I always recommend considering the long-term vision of your company. Prioritize key initiatives that drive your mission forward and leverage your capital to find the unicorn solution that truly differentiates you in the market, as that can lead to sustainable growth and stronger positioning, like we've done.

Craig Lewis, Founder & CEO, Gig Wage

Balance Financial Needs and Growth

After raising our seed round, I set my salary by balancing personal financial needs with the company's growth priorities. I aimed to cover basic living expenses while keeping the majority of funds focused on hiring talent and product development, aligning my compensation with our long-term vision and ensuring maximum runway for the business.

Patric Edwards, Founder & Principal Software Architect, Cirrus Bridge

Tie Motivation to Business Success

When we first started developing and watching the first steps of this app, it turned out that paying yourself is not as easy as I first thought. I mean, on the one hand, there's the practical side—we needed to keep the business going. But, on the other hand, there was a balance between personal needs and the long-term vision of the company.

In the early days, as a co-founder, I was really focused on improving our business process. We were changing and adapting a lot, so the idea of paying ourselves a "market rate" seemed weird. Instead, I went with something that would cover my basic needs and keep in the business as much as possible. I wanted my motivation to be tied to building a platform, not lining my own pocket. At that time, the main thing that guided me was the idea, and that was enough for me then. I knew we were in that shaky startup phase, trying to prove the concept and define our audience.

But, of course, there were times when I had to remind myself that I had a life too, and I couldn't just work without compensating for the sacrifices I was making. So, I looked at it as a kind of "investment" in myself, understanding that the payoff may not come immediately, but gradually, as the business grows and changes.

The goal was to keep things in perspective: this was a marathon, not a sprint. And, when we started getting some achievements, I could start adjusting things, both for myself and for the team. It's all about understanding that business is about the long-term work and sometimes the ability to wait is your best friend.

Anatolii Kasianiv, CTO, My Drama

Start with Profit-Based Salary

My initial salary in the first two years of business was whatever profit was left over. It was minimal and often felt as if it wasn't enough. It required sacrifice. Then, as the business began to grow, I saw my profit-based salary inch closer to my previous W-2 salary. Once it surpassed my previous role's pay, I began paying myself a salary based on a small increase from my previous role. With further growth, my salary growth increases by small percentages that match the overall company growth each year. For example, if the company grows by 6%, my salary also increases by 6%.

‍Bailey Smith, Founder, Indie Travel Design