If a startup snags $1M in funding, how much can the founder pocket?

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Once you grab that funding, it’s time to call a board meeting.

Investors usually don’t demand crazy control at the board level—founders still hold most of the cards early on. But finances? That’s where it gets real. The company’s yours, sure, and you’ve got signing power, but there’s a cap on how much you can throw around. Big moves like acquisitions or mergers? Board can’t just greenlight those—shareholders gotta weigh in. Taking someone’s money means you can’t just YOLO it. Early days, you’ve got tons of freedom, but the deeper you go, the tighter the leash. A VC’s juggling 20-30 projects per fund, maybe 2-3 funds at once, so 50-60 startups total. To them, you’re just one piece of the pie—they’ll help where they can, but don’t expect them to babysit. Oh, and financial investors? They’ll try to push out those angel investors in Series A or B to clean up the cap table and keep things simple

Landing $1M to $5M in funding? At today’s VC market rates, that’s probably somewhere between angel and Series A, so you’re still in early startup mode. Companies at this stage are usually still hunting for a solid biz model, not turning a profit, and just burning through investor cash. So, founders trying to ‘level up their lifestyle’ with that money? Yeah, —pretty much impossible.

If you’re a founder serious about building something big, you’re pouring that $10M into tech and biz growth, not your bank account. Keep your salary low—enough to cover basics—‘cause anything extra just goes to taxes, and real founders don’t need fat paychecks to stay motivated. Company can cover some living costs, like travel or meals, since work and life blur together. Just keep it lean and humble.

If the company keeps raising rounds, cashing out a small chunk to upgrade your life makes sense—you’re earning it if the startup’s killing it. But if you’re just scheming to pocket the funding? Plenty of ways: crazy reimbursements, bonuses, or funneling cash through a shady ‘partner’ company with your buddies. Stay sneaky, and it’s technically legal, but investors aren’t dumb. Pull that crap, and your rep in the VC world is toast—no one’s funding your next gig.

Also, startup failure’s not all the same. Some burn through angel cash and crash, others hit 3-4 rounds and a few hundred mil in valuation before fizzling. Some go bankrupt, others just limp along, not quite meeting VC dreams. Even ‘failed’ founders can create value for investors, just not the jackpot they hoped for. Those founders might still score a payout—not from the funding pool, but from whatever value the company’s built.

How much you raise and how much you pay yourself in salary or bonuses? Those are pretty separate things. The cash you pull in from funding is for building the biz, not stuffing your pockets. Handing yourself a bonus is a conflict of interest—definitely not something you should decide on your own. That’s for the board to handle.
Raising $10M usually means you’re in angel or Series A territory, where the company’s desperate for cash to grow. At this stage, I can’t think of any good reason a board would greenlight extra bonuses for the founder. That said, if the board agreed to a $50M post-money valuation but the CEO hustles and lands investors at a $100M valuation, that’s a big win for shareholders. If I were on the board, I wouldn’t mind tossing the CEO a bonus for doubling the company’s value. But if I were the CEO? I wouldn’t take it. True story: something like this happened to me, and I passed on the cash.
As for salaries, from what I’ve seen, founders usually take about 80% of what a professional manager in a similar-sized company would earn. Say a GM at a 10-person startup makes $40K-$50K a year—founders might take $30K-$40K, give or take. Early on, when the company’s strapped for cash, you shouldn’t be thinking about “how much can I pay myself?” but “what’s the minimum I need to scrape by?”
Once the company’s grown enough to start poaching big talent with high salaries, then founders can adjust their pay to match. For example, if you’re the CTO and a founder, and your company’s now able to hire top dogs from big tech at $100K-$120K a year, you could justify paying yourself $70K-$100K without pissing off shareholders.
Bottom line: a legit founder or co-founder shouldn’t be obsessing over how much cash they can pull out of the company right now, whether it’s through salary, bonuses, or shady backchannels. Bluntly put, if you’re fixated on that, your heart’s not in the right place.