As one might have thought, the more funding a startup raises, the more its staff are paid.
The finding has come from the Australian Startup Salary Guide, compiled by recruitment firm Think & Grow and StartupAUS.
Remuneration packages, comprising salary, equity, and other benefits, of more than 2,500 staff were analysed to compile the guide, with information coming from an online survey and analysis of 47 venture-backed startups. Startups were analysed at three levels of funding: up to $5 million, $5 – $10 million, and $10 to $50 million.
Beyond salary and equity, the report found the amount of capital raised also impacts the types of roles on offer, while there are also significant differences in staffing between business-to-business (B2B) and business-to-consumer (B2C) companies.
For example, Anthony Sochan, partner at Think & Grow, explained B2B startups are more likely to be hiring senior engineers than their B2C counterparts. In addition, few B2C startups hire product managers in their earlier stages, and no B2C startups analysed had hired any data science professionals.
“We can clearly see how companies undergo restructuring and expansion in terms of management roles as they raise higher amounts of capital. In a sector where many of the jobs are less than a decade old, a continued understanding and breakdown of salary benchmarks is key to the sector’s success,” Sochan said.
The report found CEOs of startups that have raised up to $5 million are paid, on average, just over $113,o00 a year, and hold an average of 36.22 percent equity.
The salary increases to an average of $220,146 for startups that have raised between $5 – $10 million, but back down to $178,022 for CEOs of startups that have raised between $10 – $50 million.
Meanwhile, senior engineers also enjoy nice salaries: a CTO or VP of engineering at a startup that has raised up to $5 million earns an average of $130,750 with 2.2 percent equity; on the next level up the average is $194,819 with an average of 1.3 percent equity; at the third tier, the average is $192,961 with average equity of 1.88 percent.
Alex McCauley, CEO of StartupAUS, believes the report will help dispel the idea that working for a startup is “a risky adventure fuelled by hope and instant noodles”.
“Actually, startups – particularly funded startups – can provide secure, competitive salaries along with the prospect of owning equity in a high-potential business,” he said.
While Australian startups are not yet able to match the salary packages on offer in places such as Silicon Valley, McCauley believes they can compete in other ways.
“We have a fresh and energetic community where talent can really stand out and have powerful impact. We are also a fantastic gateway to Asia and have many non-monetary advantages such as great lifestyle, family friendly cities and considerably more generous vacation time than the US,” he said.