Tag Archives: CTO

What salary and equity should a startup CTO expect? #Startup #Equity #CTO

If you have decided that your goal is to become a CTO, then I recommend you direct your career towards that goal. Putting together a working backwards plan to become a CTO and executing to that plan helps. You can network your way to a job or find out about CTO jobs that are open as well. Having a goal and plan is good, but you need to direct your experiences and goals to become a CTO if that is your desire.

Chief Technology Officer Compensation

There are 5 variables to consider for the compensation, which might make it complicated, so I will try to simplify for 2 of the variables in this post – size of company and job location. I have collected data from 11 sources – PayScale, Glassdoor, LinkedIn, Salary.COM, Comparably and VC databases such as Pitchbook – sources below.

The variables are:

  1. Size of the company: Impact of the role to the organization is a key determinant. Startups pay less than larger companies, but give more in stock. Seed stage startups will pay less than later stage, but give you more equity (in terms of % ownership).
  2. Location of the role: Roles in the US pay the most, followed by Europe and then in other regions. Indian CTO roles do not pay as much for most startups. Self reported data from 594 CTOs place the salary at INR 2.5 Million to INR 5 Million (25 L to 50 Lakhs)
  3. Industry segment and sector: CTO roles in technology pay a lot more than roles in non technology companies, but that is changing quickly.
  4. Scope of the role: CTOs are expected to be technical leaders, but many organizations also expect them to play the role of VP of Engineering and CIO in certain cases.
  5. Years of experience or CTO background: The rule of thumb is that more experience equals higher pay and equity. Similarly if you have experience building large scale systems at companies such as Amazon, Facebook, Google or Microsoft, you will get paid more than if you are not.

The numbers below assume you are hiring a CTO, as opposed to having a co-founder as a CTO.

CTO Salary and Compensation
CTO Salary Data

Sources: US Salary Data, Bay Area Salary Data, EU Salary Data, India Salary Data and Asia Pacific Salary Data.

The next question is how can I get on the more or show that I deserve more than the guideline range? That question is best answered situationally and if you want to setup time with me for some advice feel free to email me.

The data is above is very subjective and has many nuances. Obviously salaries are very personal and negotiations play a big part in the final salary you get.

How do I become a CTO?

CHIEF TECHNOLOGY OFFICER: A ROLE GUIDE

A frequent question I get that I want to help answer in the next few blog posts is “How do I become a CTO? or Chief Technology Officer.

I used to give a few simple answers before: a) Focus on building a great technology profile -e.g. GitHub profile, speaking engagements, etc., b) Network as much as you can with potential founders and c) Learn as much as you can about the business elements of your industry, especially customer trends.

I realized these were good enough for a 30 minute career counseling call, but not very valuable for people who want to plan their career for the long term.

Now that I have more time, I thought I would take a data driven approach to answering this question.

There are great articles on what a CTO does, so I am not going to answer that question.

Instead lets focus only on what it takes to become a CTO.

There are about 780K people with the title “CTO” on LinkedIn and roughly 159K with the title “Chief Technology Officer”.

Filtering them by size of company, indicates 11% are in large organizations (> 10K employees), and over 75% are in small (<100 employees). Many of the large organizations have multiple CTOs (e.g. Microsoft has 38 people in my network alone with a CTO title). Many of them are CTO of a specific business unit, or industry vertical function.

Segmenting by location, 38% of CTOs are in the USA, 27% in Europe and the rest in other locations.

There are 29 Million software developers in the world.

So roughly 1 in 30 software developers could become a CTO.

In my LinkedIn network, I have 1st degree connections with 541 colleagues with the title of either CTO or Chief Technology Officer.

I spend a few hours learning to deploy a LinkedIn scraper. It took me a lot longer than I thought it would, but that’s another story.

I scraped my network for 7 parameters:

  1. Name: E.g. Mukund Mohan
  2. Title: E.g. Chief Technology Officer
  3. Location: E.g. Greater Seattle Area
  4. Company / Organization: BuildDirect
  5. All organizations they worked at before, title and tenure in each organization. E.g. Director of Engineering, Microsoft, 5 years
  6. Education: E.g. Bachelor of Engineering and years at school (If available)
  7. Skills: e.g. product management, startups, etc.

I put this data into an CSV file just to view it in an easy way for me to visually review it.

Three patterns (or archetypes) emerge:

The career technologist (52% of my network)

This individual has over 16.5 years of average experience after graduating, working at 4.6 organizations with an average tenure of 6 years in each.

This indicates that the most frequent way to become a CTO is to have tenure as a developer and grow in organization(s) over time. There were CTOs with over 27 years of experience in my network, and the lowest in this segment had 14 years of experience as a technical leader.

Some examples: Kamal Hathi, Joseph Sirosh and Marianna Tessel.

The startup technologist (35% of my network)

This individual has about 10.2 years of experience after graduating, working at 3.1 organizations with an average tenure of 3 years in each.

This indicates the 2nd most likely way you can become a CTO is to start your own company (likely with a co founder). I tend to have more startup CTOs in my network than others do, so this may be due to my background and experience.

Some examples: Tom Harel, Aravind Bala and Farah Ali.

The fast break upstart (6% of my network)

This individual has 8.7 years of experience after graduating, working at 2.3 organizations with an average tenure of 4.6 years.

This archetype is unique and hard to find because they were at the right place at the right time. They joined a fast growing company (Google, Facebook, etc.) at the early stage and grew with the organization quickly enough to then get a role elsewhere as a CTO.

Some examples: Gaurav Oberoi, Palak Dalal

The rest (7% of my network)

The rest are a motley crew of technologists with long tenure, but I am not able to put them into a specific bucket. They have done several roles, including software development, product management, etc.

In the next few posts I will address questions such as

How do I direct my career to become one of the 30 people who can become a CTO?

How can I put a plan together to achieve my goal to become a CTO?

Where do I look for CTO positions?

What compensation and equity should a CTO at a startup expect?