So raises are a nuanced topic in start-ups. In the early days, most of your team won’t even have been there for a year. So there’s often seen as no point in raises. And even later, many founders are resistant to giving “across the board” raises. They’d rather focus them on the top performers.
But time goes on, the years go by, and most traditional employees expect an annual raise.
In 2023 though, it’s different. Because salaries and comp went up so, so much the last 2 years. And because so many folks are doing hiring slowdowns, hiring freezes, and/or layoffs. And one thing founders are especially resistant to is giving raises to mediocre, overpaid employees. I.e., the ones almost laid off. Yet, at the same time, inflation is at record highs for most of our work lifetimes.
Almost everyone overhired during the Boom pic.twitter.com/2xJYmYgIxm
— Jason
Be Kind
I don’t have the answers here. But I did find the SaaStr survey above informative. 48% of you are giving no raises at all for 2023. The rest are giving raises split almost equally between small (2-4%), medium (5-8%), and high (9%-10%) or more.
Net net only 15% of your are giving raises above inflation, and only half are giving raises at all.
It does appear that the “arms race” of startup comp may be temporarily on pause. And I think that makes a lot of sense, especially after the huge run-up in comp over the past 2 years.
Still, I’ve also learned that while few folks truly appreciate being overpaid … almost everyone resents being underpaid.
A related post here:
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Jason Lemkin, Khareem Sudlow
