This one is more of an open discussion and not a question that is specific from my perspective. One of the reasons why people start companies and are passionate about solving a problem is to make money for themselves and for others around them.
As a founder, there is always this burning question that pops-up during two major stages of the company:
- They acquired a bunch of paying customers and are tasting profits
- They got their first seed round
The question is:
As a founder, should I pay myself before the company reaches say 6 months worth of savings in the bank account?
My initial thoughts are:
- Founders need to pay themselves as soon as they make profits;
- Taking money from the profits cannot be a huge amount; take what I call the “Frugal Money”; money that helps you meet your basic needs;
- As the company grows, pay yourself more;
If you have an investor on-board, anyone who is restricting you to not pay yourself a minimal amount to cover your expenses might not understand the importance of the personal life a founder has.
I think this is a question (a tough one though) that every founder asks, where there is no definite set of answers for them. Instead, I thought Converse could be a great place for us to discuss on this issue, and get some clarity on it.