The Swedish VC Creandum has once again broken down the salaries of founders by phase, location and gender. This is how much you can pay yourself as a founder.
In general, the salaries of startup founders in Europe have not increased – female founders are still behind their male colleagues. Klaus Vedfelt/Getty Images
There are new numbers – but they are the same as before. The Swedish VC Creandum has one in collaboration with the Helsinki-based Slush A large-scale study was carried out on the question: “What do founders in Europe earn?”. Key finding: Exactly the same as last year. The salaries of founders remained the same between 2022 and 2023 and did not increase. Not good news. Because, the report says: “Many founders would probably argue that with inflation prevailing across Europe, no pay increase equates to a net loss.“
However, the bad news doesn’t come as a surprise. In the generally gloomy economic and investment climate, the motto is: keep your money together. It simply doesn’t pay off for founders to overpay themselves, says Michelle Coventry, Head of Talent at Creandum, commenting on the key finding of her report. “The lower your expenses, the longer the run rate, and the better it is for you, your co-founders and your companies. “Now this is more important than ever and is exactly what investors want to see.”
Seed founders start at 50,000 euros, and from Series B onwards they earn less than 150,000 euros
Quelle: Creandum Founder Compensation 2.0
Founder salaries increase with the financing rounds. Nothing has changed in that regard – nor in the absolute figures: on average, founders of Series B startups in Europe earn just under 150,000 euros. And Creandum had already determined almost exactly this value in December 2022. In the Series A, founders paid an average of 115,000 euros gross per year in 2023, in the seed and preseed area well under six parts, between 50 and 75,000 euros. The average preseed salary increased by two percent compared to the previous study.
Creandum also takes a look outside the box and asks about the salaries of founders who do not have institutional investors on board. Overall, the salary of bootstrapping founders is significantly lower than that of their colleagues with venture capital support and is around 45,000 euros. However, it has increased by four percent compared to the previous year.
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And it is the bootstrappers who continue to pay themselves bonuses – and almost only those, as the Creandum study shows. “We see a clear gap between the compensation of bootstrapped and venture founders in relation to the bonus mechanism,” he says in the report’s commentary. “While bonuses are quite common in bootstrapped companies, at least in the early stages, this changes as soon as institutional capital is injected to grow efficiently and sustainably on an accelerated growth path.”
Where do founders earn the most?
Quelle: Creandum Founder Compensation 2.0
As in the past, founders in the UK earn the most on average. Germany follows in second place in the European comparison with Austria and Switzerland, with France in third place. The Baltics end up at the bottom. The difference is enormous: While UK founders across all funding stages and company sizes pay an average of almost 100,000 euros, the average salary in the Baltic states is just 30,000 euros.
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Not to forget: equity component
When talking about startup founders’ salaries, one thing must not be forgotten: what they get paid each month is only part of what they have to gain. Equity is always part of the earnings, so to speak. And that’s why the makers of the study take the opportunity to remind: “Founders, the ultimate payday is coming when you liquidate your shares.”
It is in the nature of things that the equity portion of founders decreases as their startups mature. In the first phases, founders give up most of the shares, so that Europe’s founders in Series A only hold 15 percent of the shares on average. So: every single one.
“It is important that you are aware from day one of the dramatic impact the number of co-founders has, as the dilution factor increases exponentially with this number as the funding rounds progress,†says the report’s commentary . Two or three founders are currently the norm. There is a huge difference between two founders or six co-founders: “That has a significant impact on your wealth creation. This means you have already been watered down before you even reach Serie A, and your freedom of movement is more restricted.“
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Mind the Gap: The salary difference between founders remains significant
And then there was this not new finding: There is still a salary gap; female founders earn significantly less than male founders. Across Europe, across all financing rounds: most clearly in the seed phase with 13 percent more money for men. With one exception: According to the Creandum report, in bootstrapped companies it is the other way around, where women earn more – although in comparison to VC-backed startups it is rather small anyway.
For the study, Creandum asked founders from his own portfolio as well as from the portfolios of other European VCs last fall to anonymously fill out questionnaires about their salaries, financing situation, size of the company, etc. The VC employees then created the report from around 700 submissions from more than 50 European cities.
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