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Entrepreneurs Without Salaries?

Question: How do entrepreneurs without salaries sustain their families and pay bills?

My answer:

As an entrepreneur without salary,

entrepreneurs without salary

I built a business and supported my family at the same time by continuing to consult in the same field I was developing software for. That’s not unusual. I did not have the luxury of not making an income. When I started Palo Alto Software, we already had four kids and a mortgage. Not making money was not an option.

So that was a lot of work.

It was hard. But it’s what really happens most of the time … entrepreneurs do a lot of work on the side, in between, to build their business without the luxury of working full time for free.

Few investors want entrepreneurs without salaries

I expect founders to work without formal compensation only during the very earliest phases, because they have to. I expect that to be temporary. And when I invest in them, I want there to be enough money to pay them. I don’t believe entrepreneurs without salaries is a sustainable idea as they grow a business. People have lives. They need money.

I don’t like it when founders promise to work for free over any extended period. It doesn’t work. They burn out. They need jobs and income so they quit.

Remember the big myth

The myth I refer to above is that startup founders are supposed to work for free, and that investors want them to work for free, even as there is capital to work with. That’s just a myth. IMO.

Originally posted on Quora:

My answer above has generated half a million view, more than 1,500 votes, and 61 comments so far on Quora, the big question-and-answer site.

And, if you’re curious, check out the other answers to this same question. There are several dozen of them.


  • Nick Wilson says:

    I completely agree that an entrepreneur without a salary cannot work well for a long time. I think that money not only satisfies the needs of life but is also a quantitative confirmation of the result. This is not only additional motivation but also some way to feel important and productive.

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