[joshu]

Right.

Founders are very highly compensated in equity, so asking that they take a lower salary is a reasonable argument, but may not be practically possible. (People with mortgages shouldn't start up? etc)

The main issue is that strong talent can get better prices elsewhere, so you either have to give them a huge chunk of equity, or reasonable salaries.

I think people here are talking about startups that 1) can be bootstrapped in a year 2) by two or three college kids 3) with little significant technology other than RoR and mySQL or whatever. I avoid investing in startups like this because honestly I don't think they have great chances of having exits.

[netcan]

It sounds like at early stages founder salaries are an issue. Does the number of founders and their salary needs have much of an impact on early valuations?

Say startup A has 3 founders willing to take $100k gross. They hire 2 $100k employees 100k expenses. Startup B is a single founder with a mortgage that needs $100k and hires 4 $100k employees and $100k expenses to get the same amount of work done.

Startup A has 1 year runway on 400k. Startup B has 1 year runway on $600k. Would this be reflected in valuation?