What is Market?

A breathless entrepreneur is on the other line.  "I’m being courted to become VP of Business Development at this hot, venture-backed start-up.  I have no idea what I should be negotiating for compensation."  She races to the punchline fast, with visions of being cheated by the mean VCs dancing in her head, "Can you simply tell me:  What is market?"

I can only attempt to answer this question with the perspective of the Boston-area, venture-backed start-up market.  Keeping that in mind, and recognizing that every number and opinion has an asterix next to it with a large footnote "it depends…", here goes.

CEO.  $175-225K base, $40-80K bonus.  5-7% of the company, maybe 6-8% if they arrive shortly after the A round.  Larger companies are at the high end of cash and lower end of equity.

COO.  $150-200K base, $25-50K bonus. 1-2% of the company.  This position is rare in companies of fewer than 100 employees.

"Top 3-4" VPs (3 most valuable VPS, for example, might be VP Eng., VP Sales, VP BD, CFO).  $125-175K base, $25-50K bonus, 0.75-1.5% of the company.  Sales VPs are typically at the top end of this range.

"Other VPs" (for example, VP Services, General Counsel, CFO).  $125-175K base, $0-35K bonus, 0.4-0.8% of the company.

Outside Board Member.  No cash or modest monthly cash stipend for consulting.  0.25-0.50% of the company.

There are always special cases and special situations, but these are reasonable rules of thumb.  At the end of the day, "market" is whatever you can negotiate for yourself!

5 thoughts on “What is Market?

  1. Great start for the blog!
    Any opinions on east coast vs. west coast VCs and their receptivity to advertising or subscription-based consumer services? Seems like there’s a lot of funding happening in the Valley of social networking startups with very little action here.
    Myron
    I am getting the feed just fine using Onfolio 2.0.

    Like

  2. Nice summary Jeff…also as an unrelated aside, your syndication link does not seem to work. I’ve tried subscribing off various newsreaders and they can’t seem to find the RSS feed.
    just a heads up…keep ’em coming…

    Like

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