Do You Get to Draw a Salary, if funded by a VC?

Heavens, yes! One of the purposes of bringing in an angel/VC firm may be to provide cash to disburse salaries to founders and new employees. Of course, you will own a smaller part of the company than you did before the VC came in. But if the inputs of the VC can increase the value of the company you will end up with a higher value in your hands, even with a lower percentage of ownership.

However a VC may also want to restructure the management team, so if you are the CEO, you may want to check on whether the VC thinks you can take the company to where the VC would like it to go. In other words, you’ll get paid a better salary than before, provided you retain your job! Often what happens is that the CEO position is taken over by someone else while the founder CEO takes on other senior leadership role in the company.

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