Earlier this year TechCrunch promoted a “2014 Startup Salary Survey”, created by a number of credible players in the UK startup community. Enternships; Seedcamp; ICE; and Gordon & Eden came together to try to bring some clear data and transparency to the UK’s startup scene in terms of salaries, including data around the proliferation of share options amongst staff at startups. The survey managed to get 400 respondents, the vast majority from the UK, with a small percentage answering from outside the UK. Some 44% of respondents were co-founders.
The headline figures found that while almost 60% of startup employees have a ‘very clear’ idea of their equity position, over 40% of startup employees in predominantly UK startups are either unclear on how much equity they have in the company or know they have none at all. The average equity awarded to non-founders when entering companies prior to the company receiving any funding was 3%.
The average startup consisted of 80% men, 20% women.
The average age was 33.
The average number of years in the ‘digital’ sector was over 8 years.
Most companies were not yet profitable.
The findings around equity are perhaps of the most interest to startups.
Of the respondents answering the Equity question, 284 out of 338 received equity, or 84%.
The average equity (% of company value) awarded to non-founders when entering companies (excluding those with 0% equity) was:
Pre Seed – 3%
Post Seed – 1.77%
Post Angel – 1.23%
Post Series A – 0.78%
Post Seres B – 0.43%
Which statement described their equity situation best?
Very clear idea of equity: 57.7%
Rough idea: 7.4%
No clue: 8.6%
No equity: 6.5%
Blanks/unclear answers: 19.8%
Vesting schedule of those who received equity (of 284 answers):
0 years: 20.4%
0.5 years: 0.4%
1 year: 3.9%
2 years: 4.2%
2.5 years: 0.4%
3 years: 17.6%
4 years: 24.3%
5 years: 1.8%
(remainder is n/a, don’t know, don’t want to share, invalid responses).
The rest of the survey focused on salaries:
Median Salary + Expected Bonus depending on Company Size (min 10 respondents in each):
Freelancer £55,000
2-10 people £31,000
11-20 people £47,000
21-50 people £64,000
51-100 people £57,000
101-250 people £75,800
251-500 people £82,750
501+ people £122,500
Median Salary + Expected Bonus depending on Seniority of Respondents (min 10 respondents in each)
Individual Contributor £40,000
Manager £45,200
Head/Lead £58,750
Director £66,650
VP £85,400
C-Level £42,150
Median Salary + Expected Bonus depending on Company Profitability (min 10 respondents in each)
Not Profitable £40,000
Profitable £75,000
Sometimes Profitable £59,375
Median Salary + Expected Bonus depending on Tech Sector (min 10 respondents in each)
AdTech £76,000
Agency / Professional Services £39,750
Big Data £48,875
Cloud (SaaS) £50,000
E-commerce £58,750
FinTech £60,400
Mobile First £43,000
Media £39,000
Marketplaces £65,000
Social £60,000
Median Salary + Expected Bonus depending on Company’s Funding Stage (min 10 respondents in each)
Pre-Seed / Bootstrapped £30,000
Post Seed £36,000
Post Angel £43,000
Post Series A £58,750
Post Series B £65,000
Post Series C £75,802
Listed £97,005
Median Salary & Expected Bonus Depending on Function (min 10 respondents in each)
Business Development £50,050
Engineering £40,000
Marketing £41,000
Operations £40,000
Product £57,750
Sales £60,000
Strategy £105,250
Top Management (CEO) £40,000
Why did we create this survey?
Well, founders of early-stage businesses are sometimes unaware how much they need to budget for staff costs as they scale their teams. Plus, many people are unsure what their fair market value is.
Before we get into the data, there are two big caveats: Firstly, the nature of the early stage market means there are many differences between businesses – especially in how much they can genuinely afford to pay and how much compensation may be ‘deferred’ due to equity participation (as a rule of thumb, the earlier you are in, the greater the longer term upside should be).
Secondly, there is a talent premium that can break through a salary structure. Startup founders are well-aware of the added value a true “A player” can bring to a fast-moving, small team – especially at a startup where the stakes are higher. These people are sometimes worth extending a greater slice of equity to attract or ramping up your burn rate for – they can be literally the difference between boom or bust. Thus, figures around these people can skew the averages.
That said, the salary levels we found turned out to be higher than we expected overall, as generally many people in startups (particularly in Europe) are working for ‘sweat equity’ – little of no cash, but options and equity.
There are a few possible reasons for this salary range. One is that founders and investors realise that, while people recognise the trade-off in joining a startup, the talent pool will be limited if you don’t pay a reasonable salary – especially with many corporates now chasing the same talent and offering ‘startup-style’ opportunities.
Another reason could be that the startups who responded were the better funded businesses or the better connected to have received the survey. Of course, it may have been that a greater proportion of senior employees completed the survey as founders and managers tended to be the initial recipients. All respondent data was completely anonymous.
This is the first survey of its type to come out of the UK and was something of a minimum viable product. We’re are interested to hear feedback on areas that employers and employees would really like to see covered in the next release. So please leave a comment below. You can also email contact@gordoneden.co.uk for further information.
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