How do you determine your salary as a Founder? 5 questions

As a founder, you work a lot, eat a quick bite too often and you may not have had a decent vacation in months. But you are also human. You have rent or a mortgage, maybe a family, and a life outside your startup that doesn't stand still. And one question still gnaws at me: what do I pay myself? It is not a sexy topic, but it is crucial. Your salary determines whether you can pay your rent/mortgage, how investors see you, and whether your team trusts you. And if you have a BV (private limited company), the DGA (Director-Major Shareholder) regulations make things even more complicated, with a minimum salary of €56,000 per year in 2025.

That's why five questions that force you to think about your salary in a way that suits the chaos and ambition of startup life. With additional insights from LUMO Labs VC and Future Tech Ventures.

👉🏻 Not sure where to start determining your salary? Download our handy checklist at the bottom of this article. This makes it easier to take immediate steps without getting lost.

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1. What is the bare minimum I need to keep my head above water?

You're used to scraping. Maybe you haven't bought a new outfit in months or you're eating easily to cut costs. But there is a limit to how long you can do that. In the early stages of your startup, if you're still working with savings or a small pre-seed investment, it's tempting not to pay yourself anything. However, a minimum salary is crucial to keep you sharp. Enough for rent, groceries, travel costs and a drink at an event here and there.

Why is this important? Without a basic income, you get distracted by financial stress. You can't think about your next pitch if you're concerned about the energy bill. But you also have to be economical, every euro you spend on yourself does not go to your product or team.

What to do:

• Make a simple list of your monthly expenses: rent, food, insurance, any debts. Cut away luxury but be realistic. 
• Set a salary that covers your basic needs and include it in your financial plan. As a DGA, however, you won't just get away with a low salary. The tax authorities require you to pay yourself at least €56,000 per year (€4,667 gross per month), unless you can prove that your company is unable to do this financially. For startups with little cash flow, this is a challenge.
• Discuss this with your co-founders or an advisor to make sure it's feasible within your runway. 

Ensuring that your essential personal needs are met is crucial to prevent private stress and to maintain full focus on your startup. But this basis is not the same for everyone. A student can make ends meet on €1,000 a month, but a founder with a home for sale and a family is in a different situation.

Niek Huizenga, Fund Manager Future Tech Ventures

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2. Does my salary match what investors expect of me?

You've just completed a pitch. The investor opposite you nods, but then asks, “What are you paying yourself?” It's a trick question. If you ask too much, you don't seem committed to growth. If you don't ask, they wonder if you're serious. Investors want to see that you're frugal, especially in the pre-seed and seed phases. In the Netherlands, a typical seed phase salary (usually in the form of a management fee) is €6,000, -/8,000, - per month (depending on family situation, for example). But it's not just about the number, it's about what you radiate.

For example, Niek Huizenga and Kyra Weaver from Future Tech Ventures note that founders' salaries must be realistic and appropriate to their phase of life, but higher than the minimum DGA salary is difficult. More money to salary means that less can go to the company. And the founder's reward lies in the shares in the event of an exit.

Kyra Weaver emphasizes that when negotiating with investors, you can present a well-founded calculation of your salary needs and must build in flexibility. In the event of startup delays, which are common, investors look at your salary to see if there is room to support growth.

For VCs, when it comes to fees and salaries of founders in the early phase, it is important that this amount is enough for the founders to sleep well and not enough to be distracted.

Andy Lürling, founding partner LUMO Labs VC

What to do:

• Check benchmarks for your phase and region. Inquire with other founders who are either also in an early phase or are a little further along.
• Be transparent in your pitch deck: state your salary and link it to your growth strategy.
• Plan ahead: When you reach a new round of funding, suggest a modest salary increase that matches your new responsibilities.

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3. Am I honest with my team about my salary?

Your team is your backbone. If your salary is far out of balance with that of your team, it can cause tension. Imagine: you pay yourself €5,000 a month while your first developer gets €2,500. That doesn't feel good, right? In the early phases, founders often earn slightly more than their team, but the difference must be small. In later phases, such as a scale-up, your salary should be commensurate with that of senior roles, such as a Chief Revenue Officer (€100,000+ per year).

If you start filling senior roles as your organization grows, it is not surprising that these people earn more than you, as your upside lies not in your salary or fee, but on your shares upon exit.

Andy Lürling, founding partner LUMO Labs VC

What to do:

• Sit with your co-founders and discuss how your salaries relate to each other and the team.
• Establish a principle, such as: “My salary is a maximum of 1.5 times that of our highest-ranking employee in the seed phase.”

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4. Do I take equality and diversity into account in my salary choices?

You're not just a founder, you're a leader building a culture. A painful reality in the startup world is that inequality exists. On average, female founders earn 13% less than male founders in the seed phase, and that gap grows as companies scale up (Carta, 2024). If you want to build a diverse startup, and you should want to, because diversity drives innovation, you need to make conscious choices about salaries.

This isn't just about your own salary, but also about how you pay co-founders and team. If you're not paying attention, you can inadvertently instill inequality in your company.

At LUMO, we do not accept any difference in salary or fee between male and female founders. Of course, we do look at the founders' lives with regard to the amount of the fee/salary.

Andy Lürling, founding partner LUMO Labs VC

What to do:

• Do a quick check: do you and your co-founders deserve equal pay for equal work? If not, why?
• Set clear rules for salaries and bonuses so that there is no room for arbitrariness.
• Consider talking to an HR expert to build a compensation structure that's inclusive from day one.

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5. Do I have a plan to protect my stocks and maximize my real reward?

Let's face it: your salary isn't what it's all about. As a founder, you dream of the day your startup is sold or goes public. Your shares are your real reward. But after each funding round, your share decreases. After Series A and B, you may still have a small percentage (< 5%) of your company left. If you don't negotiate smartly, that percentage can shrink even further.

The real jackpot is in the exit. A well-thought-out stock plan can make the difference between a nice bonus and generational wealth.

Feel free to discuss the dilution with your current and new investors, they are of no use if the founders team is no longer motivated enough.

Andy Lürling, founding partner LUMO Labs VC

What to do:

• Hire a financial or legal advisor to review your stock agreements.
• Negotiate hard at every funding round to protect your stock, for example through anti-dilution clauses.
• Think ahead: what do you want your shares to be worth in the event of an exit, and how does your salary affect that future now?

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How do you turn this into action?

You're busy, we get that. But these questions are not something to ignore. Here's a simple approach to get started:

• Block one hour: Sit down with a cup of coffee and answer these five questions. Write down your thoughts, no matter how messy. ‍
• Make a plan: For each question, note one concrete action. For example, “Next week, I'll calculate my minimum salary” or “I'm planning a meeting with my co-founders about transparency.” ‍
• Check regularly: Put a reminder in your calendar to look back every xx number of months. Does your salary still match your phase? With your team? With your investors? ‍
• Get help: Talk to a co-founder, mentor, or advisor. They often see what you overlook.

As a founder, you are used to taking risks, improvising and building under pressure. But your salary isn't just a gamble you take. It's a choice that shows who you are: a leader who thinks about sustainability, fairness, and growth. These five questions are your compass to build a salary strategy that not only supports your life, but also empowers your startup.

Take your time, be honest, and make choices that make your future self proud.

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📝 Do you want to get started with these questions in concrete terms? Then download our checklist — a practical tool that helps you develop your salary strategy step by step. Easy to use and quick to apply.