Here's why the average startup CEO makes $130K per year

Funding raised, cash in the bank, industry, and experience all influence the salary of a startup CEO, according to Kruze Consulting.

The CEO of a seed or venture-backed startup company makes an average annual salary of $130,000, according to a recent report from Kruze Consulting.

A variety of factors can influence the salary of a startup CEO, the firm found, including total funding raised, cash in the bank, industry, and the experience of the founder. The report examined payroll data for some 125 seed and venture-backed startups, with the average company in the analysis having raised between $7 million and $8 million in venture and seed financing.

SEE: Year-round IT budget template (Tech Pro Research)

A startup's funding impacts the CEO's salary, the report found. Roughly, for every additional $1 million raised, a startup CEO will take home between $4,000 and $5,000 more in annual salary. CEOs at companies that have not recently raised capital will often dramatically reduce their own salaries to save money, which the analysis supports.

Those with the highest annual salaries tend to be running companies that have either recently raised capital, or are performing very well and have not raised money for a long period of time.

A CEO's salary also depends largely on what industry their company falls into, the report found. Chief executives in the biotech ($158,000) and healthcare ($136,000) industries tend to earn more on average than those in other industries. However, founders in those areas tend to hold academic credentials like doctoral degrees and previous experience than those in other industries often lack.

To learn more about how to negotiate a raise in your salary, no matter what position you are in, click here.

The big takeaways for tech leaders:

  • The CEO of a seed or venture-backed startup company makes an average annual salary of $130,000. — Kruze Consulting, 2018
  • A variety of factors can influence the salary of a startup CEO, including total funding raised, cash in the bank, industry, and the experience of the founder. — Kruze Consulting, 2018

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Image: iStockphoto/Melpomenem

By Alison DeNisco Rayome

Alison DeNisco Rayome is a Senior Editor for TechRepublic. She covers CXO, cybersecurity, and the convergence of tech and the workplace.