$10K won’t make much of a difference in the final outcome.
$10K can make a massive difference in alleviating personal stress levels - and have limited marginal benefit for a founder with fewer expenses.
Any founder who genuinely doesn’t need the extra $10K, and has a problem with a co-founder who genuinely needs the extra $10K getting the $10K - and accepts that that $10K is not likely to make a difference in the final outcoming - is not acting rationally.
Causing friction in this scenario is, to me, a huge sign of immaturity, ignorance, and a lack of commitment and/or understanding of the long game.
I meant it doesn't make a big difference in the outgoings of the company. Not sure I agree with what you're saying. But I honestly also don't think (early stage) investors should even be paying the salaries of the founding team.
The reason most people raise early stage finance is to reduce their personal risk, and push that onto the investor. Which is fine if both parties understand the deal they're getting (risk reduction for potential massive upside).
But since this is mostly done to take risk away (during the riskiest phase of the company), I also believe you should equal the salaries. With equal equity stakes, one party shouldn't be taking more risk than the other by foregoing salary.
But just going equal salaries is often suboptimal.
Founder one is 19, has no-one to depend on him, can happily live for 40k a year.
Found two is 27, has a wife and a kid, has a mortgage, the lowest "stress" free amount he could live on is 80k a year.
So what are the options:
* Pay both 40k. Founder two cannot make end meets, and has to get a second consulting job on the side. He therefore puts less work into the product.
* Pay both 80k. This is "fair", but it is literally just padding the bank account of Founder one. You are cutting your runway N months short for no real gain in output.
* Pay one 40k, pay two 80k, give 1 a bit more equity. This can also be seen as "fair", but it may not be. Founder two is bringing 10 years of experience to the table. Founder one is bringing only two. So in the long haul, you are giving one more money.
* Pay one 40k, pay two 80k, give each equity based on what they bring to the table. Maybe founder one gets more equity. Maybe founder two does. Decent chance it would be founder two, as he has more experience.
To me the right play is pay people what they need to not stress, and give equity based on what they bring to the table. Obviously I am closer to founder two in the above scenario, and I suspect a few people advocating equal pay are closer to founder one.
At the end of the day, each founder is either worth it or not. Some wizard that lives in SF so needs 120k to live? Maybe he is worth it. Some guy with a party problem that needs 95k to live, despite being a junior dev? Maybe not worth it. I think it is better to evaluate each person and see if what they need is worth it, if not keep looking for someone else!
I only consider the second and third situation to make sense, and this is regardless of whether you're founder one or two.
If you lean on early stage investment to pay yourself a salary (which imo shouldn't happen in the early stages, but I do understand why people do it: to take risk away) then by default you are "padding the bank account" of the founders.
Generally equity divisions will be decided before setting up an entity and raising investment, so by the time you get there, it will have already been decided.
Given 1) the low probability of an exit when playing the venture game, and 2) the small equity stake you'll be left with at the end if you do magically manage to exit, I don't think it makes sense to forego (any) salary if your partner is taking out a much larger amount.
But again, I don't follow the line of thinking that states investors should be paying you a salary in the early stages either way.
$10K won’t make much of a difference in the final outcome.
$10K can make a massive difference in alleviating personal stress levels - and have limited marginal benefit for a founder with fewer expenses.
Any founder who genuinely doesn’t need the extra $10K, and has a problem with a co-founder who genuinely needs the extra $10K getting the $10K - and accepts that that $10K is not likely to make a difference in the final outcoming - is not acting rationally.
Causing friction in this scenario is, to me, a huge sign of immaturity, ignorance, and a lack of commitment and/or understanding of the long game.