Dharmesh Shah


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Startup Salary Data from Private Company Compensation Survey

By Dharmesh Shah on November 14, 2008

It has been a while since I’ve written an article about startup compensation (what do founders, CEOs and others make)?  My previous article about startup founder compensation continues to be popular, despite having been written in 2006.salary compensation data

The data in this article is taken from compstudy.com which publishes a report titled “2008 Compensation & Entrepreneurship Report in IT”.  The report is based on a compensation survey.  This year’s report is based on 342 survey respondents representing 1,600 executives.  Note:  I am not affiliated with CompStudy.  I received the report for free, and I do not know what they charge for it.

Here are some points from the report that I found interesting. 

1.  This year’s survey was conducted between April and June 2008.

2.  31% of the executive population this year were founders in their companies (up from 28% in the prior year).

3.  CTOs and CEOs were the most frequent founders.

4.  Average base salary across all positions increased by 4.7% from 2007 to 2008. 

5.  On average, non-founding CEOs received a 5.4% grant.

6.  Outside of the CEO/President the non-founder Head of Technology holds the highest average equity percentage at 1.53%.

7.  Just 33% of the companies in the latest financing stages still have the founding CEO.

8.  For companies raising one or fewer rounds, the average founding CEO holds nearly one third of the equity.  After two rounds, this reduces to an average of 18%.

9.  Founding CTOs have 17.1% on average in companies with one or fewer financing rounds and 7.49% of companies with 2–3 financing rounds.

10.  CEO average base salary went from $227,000 to $237,000.

11.  Non-founder CEOs have greater total compensation ($339,000) than founding CEOs ($286,000).

12.  Founding CEOs hold an average of 22.05% of the company vs. non-founding CEOs which hold just 5.46%.

13.  The chairperson is the CEO of the company 56% of the time.

14.  Investors comprise more than half othe board of directors seats.  Outside board members comprise about 20% of the board.

So, what are your reactions to some of these data points?  What were you most surprised by? You can leave a comment here or discuss in the OnStartups community on LinkedIn (now with 30,000+ members).

Topics: compensation
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Boston: Lock The Students Up!

By Dharmesh Shah on November 10, 2008

If you’re from the Boston area and into technology in any shape or form, you should be reading Scott Kirsner’s blog “The Innovation Economy”.   Scott had an article on his blog recently titled “Boston’s Biggest Trade Associations Flunk the Student Test”.  [Oh, and by the way, Scott also writes for the Boston Globe].

The article builds on a theme that Scott has been talking about for some time:  How to keep all those great students that the Boston area is able to attract every year.

Let me open by saying that I hate students just as much as Scott does — which is to say,  I love them.  As an entrepreneur, my motives are completely selfish.  I want to keep as much raw, passionate and brilliant talent in the area as possible. 

In his most recent article, Scott looks at the local trade associations and grades them on how well they are doing to encourage and engage students.  (The comments posted to the article are worth reading as well).  I think getting the associations to pull in students more is definitely a great way to keep the students.

So, in addition to getting our trade associations to step up, here are some random thoughts on how we might lock up the students and keep the talent here:

1.  Help students build a network locally.  The more powerful and valuable the network, the bigger the sacrifice of moving somewhere else.

2.  Help students get new ideas off the ground in terms of capital and mentoring. 

3.  Help students stay students.  I think our academic institutions should invest in ways that graduating students can continue to stay involved and keep learning.  The value of all of these graduate students is much higher than just the potential alumni donations.

4.  Help students have fun.  I don’t mean in the “they need to learn how to party sense”, but in the “creativity as applied to business” sense.  Recruit student talent to help experiment with some new ideas for your business.  Try unleashing some of their creativity.  It’s not all going to work, but I’m guessing that lately, not all of your projects are working anyways.

Would love to hear your ideas on how we could do a better job locking the students up. 

And, if you’re a student yourself, what are your thoughts on how we might keep you and your awesomeness around in the Boston area?

Topics: boston
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