November 9, 2016

[Video] How do I make money from my startup if it’s VC backed? – Bobby’s Minute, ep. 49

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Long story short: a founder should have a salary. Pride is not going to keep you fed.

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How do you make money from your startup if it’s a VC backed startup? This question appears because a lot of startup founders think that the only way they can make money out of the company is when the company’s sold, so they’re thinking: “okay, what will I do until 5-10 years from now, when i’m going to sell the company?

How do I live? Do I get a paycheck?” And the answer is “Yes, you get a paycheck.” You should get a paycheck.

There are lots of founders that find pride in the fact that they don’t pay themselves and that’s a real issue. You should pay yourself.

OK, maybe not in the first months of the company (until you raise money), but once you raise at least the seed round, you should pay yourself because if you’re not paying yourself, you’re not going to be able to focus on the company.

Of course, if you have money and you can live without paying yourself because you’re already a millionaire, then that’s a moot issue, but if you’re not, you should pay yourself because, otherwise, you’ll try to find side hassles, you’ll try to find other ways to make money and you’ll not focus on your company.

So, the way you make money as a founder? Through salary. And also, by the time you have a liquidity event, you’re also going to make the bulk of your money then, but the thing is, most of the money in the early stages, you should get from a salary, from the company.

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