Inside look at what a bootstrapped founder pays themselves as they grow
My salary through the early self-funded years with context of revenue + employee counts
I originally posted this on Twitter on October 18th 2022. You may see the embedded tweet above, otherwise the thread has also been unrolled.
This was also the first tweet that really upset some people. I guess that’s what happens when you lean too hard into the first line of a tweet and the tweet gets some traction. People react and they all don’t read the thread. 🤷
So let me start with a couple of points to clear the air:
I believe founders should pay themselves, this wasn't meant to be a hero brag of sacrifice & nobility
My hope was to just share numbers with context (that no one talks about) + give love to my team who ARE the reason for how far we've gotten
It was meant as a dig on the CEOs who pay themselves 50x the average employee’s salary
A CEO's salary speaks VOLUMES about what a company values
Here's what I paid myself + our revenue + employee counts through the first 6 years of Referral Rock
First some context:
- Referral Rock is a SaaS + my 2nd tech startup
- I'm a solo founder but had a TON of help (you'll see)
- We're self-funded / bootstrapped (not against raising, just isn't in our plan)
- I have a family, mortgage, live in the US, and a dog named Uno
// Year 1 - The Solo Start
Key Milestones:
- First paying customers
- 0.5 Employee (me part-time)
- $11k Annual Revenue
Founder Pay = $0
(For personal runway, I consulted part-time)
"So why $0 pay?"
I viewed my time as the investment in the business and would take a paycheck when the business could afford to
I believe a business should have clear separation from personal finances
Business money isn't MY money and it's easier to keep those things separate from the start
This went both ways, where I didn't want the business to take personal money either (making for a happy home life)
Business money would be used for it's own expenses + growth investments
// Year 2 - First Hires + Going Full-time
Key Milestones:
- First PT hire (👋 @megsmosley )
- First sales hire (failed badly)
- 2.5 Employees
- $110k Annual Revenue
Founder Pay = $0
(still consulting on the side for income)
Paying myself could wait longer, even though I went full-time
As I hired, it was clear I needed a big cash cushion to make sure employees would never have to worry about their paycheck
(just don't mess with other people's money)
// Year 3 - Added a Partner + Took First paycheck
Key Milestones:
- Brought on a business partner (👋 @MicaLonganecker )
- Hired first developer outside of myself (👋 Thomas)
- 5 Employees
- $300k Annual Revenue
Founder Pay = $54k
By the end of the 2017 we were a mix of full + part-time employees
I hired based on what the business needed and my personal capacity to manage
It was nice that I could finally could afford to pay myself without affecting growth
"So why take on a partner?"
At that time, the weight of everything was getting HEAVY and Mica came into my life at the perfect time
He initially reached out to me to help me with sales with the slight ask of "If I kill it in sales, is equity on the table?"
He did and it was 😁
When I first met Mica he said "he could do anything I could do except code" and I loved the bravado
Yet if you ever met him he's one of the most low ego people I know
Speeding up a few years, he's HAS done everything except code + likely regrets his statement 🤣
// Year 4 - Building core team
Key Milestones:
- Hired first CSM to lead team (👋 @Meghan_McEnry)
- Hired first tech lead (👋 @KoskinenMark )
- Hired first support rep (👋 @TyraEarl )
- 8 Employees
- $600k Annual Revenue
Founder Pay = $60k + $5k bonus
We added key people in 2018 that are still with Referral Rock
I am incredibly fortunate they joined & took a bet on me when things were very chaotic
They were all (and continue to be) critical contributors to get us to where we are today 🙏
Late bonuses for myself would come at the end of the year after everything else got handled
Having a bigger team, meant keeping a larger cash cushion
At this time, I was also able to get a line of credit from the bank as an additional assurance
// Year 5 - Scaling people up
Key Milestones:
- Hired 2 Sales + 2 CSMs
- 12 Employees
- $900k Annual Revenue
Founder Pay = $66k + $5k bonus
2019 was a great year for us for scaling people + rounding out the teams
The key hires really helped bring their own management playbooks with them
We started OKRs as well as other monthly + weekly routines that are needed once you get a bit bigger
// Year 6 - Covid Slow + Higher Highs
Key Milestones:
- Revenue dip, flat, then back to growing during Covid
- First Product Manager (👋 @BosBlake )
- Marketing Manager (hey Kat)
- 15 Employees
- $1.4M Annual Revenue
Founder Pay = $78k
With the 2020 scare of Covid, I couldn't justify a higher pay for myself despite our growing revenue
Instead we added key contributors that relieved pain for everyone on the team
// 2021-2022
Founder Pay = $96k (enough to sustain my family)
Today Referral Rock has 20 employees across Product, Sales, Customer Success, & Marketing teams
We invest in our future growth + rainy day funds to keep the streak of never having a layoff
*ZERO financial debt* 🙌
"Why aren't I getting rich off of Referral Rock?"
I believe:
- separate business $ from personal $ (RR is not my personal bank)
- invest in & take care of great people to help
- when the company wins we all win together
This is a long term game and I have long term partners!