When I was coming out of college, working in finance, I used to think a lot about my salary. I wanted the best offer out of my classmates. I wanted the biggest signing bonus. I liked maxing out on raises and I liked the feeling I got getting to a six figure salary.
The funny thing was that I didn't even particularly care about the money itself. It was, in my mind, what the salary meant. It was a way of measuring performance. It was score keeping.
I missed the bigger picture of the other things that should go into career score keeping--autonomy, growth paths, equity/revenue sharing, the ability to gain public visibility, opportunities for learning, network building, etc.
As an investor, I get very involved in the hiring process of some of my earliest stage companies. One thing that comes through consistently is that salary--specifically how someone goes about the salary negotiation process--can be a consistent predictor of performance.
Nearly every time a company I've seen has had to stretch to accomodate someone's base salary, the person hasn't worked out. When canidates have had the opportunity to choose between more equity and more salary, the people who equity greedy versus cash greedy tend to be better fits for a startup. And when things at a startup aren't going well, it's your best employees that show up first with offers to cut their salary.
That isn't to say that you should accept getting underpaid just because you work for a startup--but acknowledging the reality that, especially early on, dollars given to you shorten the potential lifespan of this company, is key to understanding how things work.
At the end of the day, we could all make a lot more money at hedge funds and banks anyway, right? But, we value other things. We score keep in other ways.
Founders, I think the best thing you can do with your earliest employees is to be transparent. Show your employees how their salary effects the finances of a company. If someone looks at that situation, and requests a base pay that puts a serious strain on the company--then they're probably not a good fit. The same is true when things aren't going well and your senior folks ride their pay all the way down without being flexible about trying to make things work.
It's the equivalent of someone who sits down in the subway while watching an elderly or pregnant person stand right in front of them.
They see what's going on and they just don't care.
Working at a startup means putting others and the company before yourself--because you know you'll have the best experience when everyone else wins, too. It means being flexible about all sorts of things, like salary, that used to be your number one priority.
No one wants you to live in a barrel or your kids to go hungry, but startups are all about being a part of something bigger than money.
Statistically, and practically, it's a bad way to make a lot of money, other than by exception.