New ventures: Watch the burn … and your own pay

Startup Lawyer Ryan Roberts publishes a  reminder on the importance of startup CEO pay, both in keeping your burn rate reasonable and attracting investors.

VC Peter Thiel wrote

The lower the CEO salary, the more likely it is to succeed.

The CEO’s salary sets a cap for everyone else. If it is set at a high level, you end up burning a whole lot more money. It aligns his interest with the equity holders. But [beyond that], it goes to whether the mission of the company is to build something new or just collect paychecks.

In practice we have found that if you only ask one question, ask that.

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