The US economy may be approaching a recession, and this is causing some CEOs of American startups to take pay cuts. In one study, Kruze Consulting, an accounting company for startups, analyzed data from more than 400 of its clients and found that the average annual salary for startup CEOs dropped to $142,000 this year, down from $150,000 in 2022.
Many startup founders are looking to save money to protect themselves during a dip in venture-capital funding. In the first quarter of 2023, global venture funding reached $58.6 billion, a 13% drop from the same quarter last year, according to CB Insights. Startups are now striking fewer deals and seeing their valuations drop accordingly.
Conversely, the AI startup industry is experiencing an increase in funding. CEOs in the crypto, direct-to-consumer, and e-commerce industries are struggling to attract capital the most. Some executives have even cut their salaries to zero to meet budget requirements.
It’s not just startup founders who are cutting their salaries. Eric Yuang, the CEO of Zoom, reduced his own pay by 98% for the purpose of giving his workers a bonus, and Apple’s CEO Tim Cook and Alphabet’s CEO Sundar Pichai have experimented with salary reduction during difficult economic times.
Kruze Consulting is based in San Francisco and provides accounting services for startups. The company was founded by Intuit alumni who wanted to help startups manage their finances effectively and use that knowledge to create an impact on entrepreneur’s lives. Kruze provides financial advice on budgeting, fundraising, and compliance. They also partner with tax, accounting, and legal advisors to help clients maximize their success.
