When is the right time to pay myself a salary?

The issue of whether a startup founder should pay themselves a salary is not straight forward. Many entrepreneurs tend to simplify the issue and pick one of two extremes. They either: Get no pay. Get paid close to fair market value. They raise enough external funding to reduce the risk and afford to pay themselves. Clearly it’s more complicated than that and here are a few thoughts: Investors vs. No Investors If you’ve raised money from angels or VCs, chances are that your salary will be governed to some degree by your agreement with them. They will not want you to arbitrarily raise your salaries and extract inappropriate levels of cash from the company. Co-Founders vs. No Co-Founders If you’re the only founder in the company (and there are no investors), then chances are you can make the salary decision. This can be based on things like available cash, tax optimisation (within the law) and fair market value. Most bootstrap startup founders tend to minimise the salary...
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