Food For Thought: Criteria for Venture Success

This is a great discussion that was sent to us by Laith Zreikat, co-founder of Jeeran, from the TechCrunch50 Conference in San Francisco earlier this September. Feel free to comment if you agree or disagree, as our experience has shown that the more an entrepreneur commits to the success of his/her venture, the higher the likelihood of success. Leading by example, especially pre-revenue or pre-breakeven energizes a start-up, and poises the entrepreneur for a greater likelihood of success in the future.
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Peter Thiel: Best Predictor of Startup Success Is Low CEO Pay

by Erick Schonfeld on September 8, 2008

In a long-ranging discussion today at TechCrunch50, investor Peter Thiel (PayPal, Facebook, Slide) gave his thoughts on what is the best predictor of startup success. At the Founder’s Fund, one of the most important factors he likes to look at before deciding to invest in a startup is how much the CEO is paying himself. Says Thiel:

The lower the CEO salary, the more likely it is to succeed.

The CEO’s salary sets a cap for everyone else. If it is set at a high level, you end up burning a whole lot more money. It aligns his interest with the equity holders. But [beyond that], it goes to whether the mission of the company is to build something new or just collect paychecks.

In practice we have found that if you only ask one question, ask that.

In Startupland, everybody should be working towards the same goal: that big juicy exit. That’s the only payday any CEO should be worried about (even though more than half of them will never get it).

What’s the average salary for CEOs from funded startups? Thiel was hesitant to answer, but eventually said “$100-125k.”

Link: http://www.techcrunch.com/2008/09/08/peter-thiel-best-predictor-of-startup-success-is-low-ceo-pay/