Considerations for Determining Startup Founder Salaries According to Bukalapak Co-Founder Fajrin Rasyid

In addition to focusing on developing business, Bukalapak Co-Founder & President Fajrin Rasyid is quite active in providing digital business development tips, both as a speaker at various events and through his personal blog. The latest review he wrote on the page Medium give interesting tips about determining salary founder ideal startup.

DailySocial had the opportunity to talk directly with Fajrin to explore the topic. According to him, there are several aspects that need to be considered as a measure of an ideal salary founder, covering educational background, experience to startup conditions.

"In general, the educational background and experience from the candidate's side are decisive, but it is also influenced by the startup itself (startup stage, financial condition). The same candidate may be offered different salaries at two startups at different stages," explained Fajrin.

Startup financial condition

Fajrin directly emphasized that the company's financial condition affects the determination of the size of the company one's salary founder or CEO. For a new startup, ideally it should have a benchmark or minimum wage for all employees. Especially for the CEO, at least can be above it. Later, if the startup experiences positive growth, of course it can be adjusted again.

He also noted two important points that must be considered. First, a company must have an employee salary component. Target startup finances to improve immediately so they can get paid immediately founder. If startup is never possible to pay founder, maybe you need to rethink the startup business model, maybe it's not sustainable. How could a startup be sustainable Or get a profit if you can't just pay the salary?

Another important point is in financial statements, must still write down the salary component founder in the income statement. However, in the balance sheet, it is ideal to be able to put these components back into the company as additional capital. This has several benefits, namely an income statement that is more in line with reality, as well as an overview of the intact capital that is founder spend to build those startups. If later the startup has sufficient funds to pay, this additional capital can be stopped.

Benchmark

An interesting point that is also interesting to mention by Fajrin is the problem of benchmarking or benchmark. Because each startup is unique, making the determination process cannot be equated. In this case Fajrin gives an example if the startup is in the stage seed and knowing that the average startup at this stage pays founders 10-15 million Rupiah, so it seems too heavy for you to want to pay founder of 40 million Rupiah.

"When compared to conditions abroad such as the United States, I think it needs adjustment. Because the cost of living in each country is different. A salary of 3000 dollars in the US may be enough for founder startup in stage seeds, but it could be too big for a startup at the same stage in Indonesia," said Fajrin.

He also added that if a startup already has investors, that investor — especially if he has invested in many startups — can provide data benchmarking related to this. In the end, if the startup already has investors, then the decision should be on salary founder is no longer only taken by the CEO, but also with the approval of investors.

Other related things benchmarking which can also be taken into consideration is to ask this question: If I resign or my position was replaced by a professional, how much would I be willing to pay to hire that person? Not necessarily the cost to pay that person the same as paying founder, but at least this gives an idea of ​​the upper bound.

"In my opinion, the basic salary component should be the same. But maybe for founder or expatriate CEOs have components such as moving or housing allowances for to cover need to move from the country of origin," said Fajrin.

Need to determine salary founder

At the end of his review Fajrin explained the reason why a founder startups need to have an ideal salary. One of them is a startup leader who works independently great day. Founder paid for the work he does. That's why, if there is more than one founder, not all of them are paid the same amount. Founders can be paid differently depending on the scope of work and responsibilities.

"The same goes with co-founder others, the principle is the same (considering startup conditions). The difference is the responsibility and workload of each. Of course, this needs to be discussed together at the shareholder level," said Fajrin.

The point is that the salary set for startup founders is ideally not too big, but rather what if the startup conditions are ideal profitable. One of mindset What can be held is the desire to build a startup for the long term.