What Startups Really Pay MBAs

$40,000 or $285,000.

Those are the compensation extremes in a pool of data of pay packages for recently graduated MBAs who take positions at startups over the past four years. The self-reported data, released from Transparent Career to Poets&Quants, includes nearly 150 first jobs after B-school, ranging from small pre-seed ventures such as CallNeighbor to well-established unicorns like Airbnb and Uber.

The data, while still somewhat thin, reveals compensation at a level of detail far beyond what schools track and disclose, largely because business schools do not include stock options or equity awards that can often equal or exceed base salaries. For example, the most recent job report from The Wharton School at the University of Pennsylvania reveals that 15.1% of the 2016 graduating accepted jobs in technology firms at a median salary of $120,000, but it is unclear what those firms were and which ones paid at the top end or the low end. The soon-to-be-published data reveals one recently graduated MBA took an operations position at a late stage Bay Area startups for a base salary of $155,500 while an MBA who secured a business development role at the same company earned a baseline salary of $120,000. However, the MBA in the biz dev role received a $20,000 signing bonus and almost $60,000 in equity for a total compensation package of more than $200,000.


Transparent Career broke the startups into categories based on venture capital funding stages. MBAs entering “pre-seed” startups secured an average base salary of $84,255. For startups that have received a seed funding round, the average climbed to $93,056. Series A companies have awarded their recent MBA hires $96,600. The number continued to climb slightly to $99,083 for Series B ventures. The big leap came for MBAs taking positions at “late-stage” companies, which reported an average base of $114,759. Late-stage companies included Airbnb, Amazon, Credit Karma, Microsoft, SoFi, and Uber, among others. Included in Series B was Yelp and such MBA-founded startups as Commonbond and BaubleBar, among others.

Not surprisingly, pre-seed ventures offered greater percentages of equity compensation than any other stage, with the exception of late-stage companies that handed out the most valuable stock awards.  For example, MBAs beginning at pre-seed startups reported an average of $8,750 in stock compensation. That rate continued to drop for each stage to Series B companies, which awarded a stock compensation average of $3,750. That number catapulted to $19,804 for MBAs taking positions at late-stage companies.

For total compensation, MBAs taking positions at seed-stage companies reported the lowest average at $108,389. The total compensation variation pre-seed, seed, Series A, and Series B companies was relatively minimal from the seed-stage average of just over $108,000 to the Series B average of $115,508. Total compensation averages leap significantly for MBAs at late-stage ventures to $149,072.

For MBAs wanting to take positions at startups, the process can be like the Wild West. Startups recruit and hire on their own schedule. It can be sporadic and frustrating. And even if mutual employment interest is established between an MBA and a startup, negotiating a starting compensation package along with a title can be exhausting. The data collected by Transparent Career provides a real glimpse into what to expect from startups.

One readily known but seldom substantiated idea is that startups — particularly later-stage ventures — use stock compensation as a way to woo top talent with lower cash outlays than other industries, including consulting and finance. According to Transparent Career Co-Founder and COO, Kevin Marvinac, “stock” compensation is broken down into equity and restricted stock units (RSU), both of which are “usually subject to vesting schedules and other restrictions,” Marvinac explains.

“My theory is that large, late-stage “startups” — generally companies with funding of $25 million or above — are giving away large amounts of RSUs to entice top talent to take a pay cut,” says Marvinac, who is also a current MBA at Chicago’s Booth School of Business. “In my fairly uneducated opinion, this is actually a smart decision financially, since it depends on an IPO that may or may not ever actually happen — especially given the current bloated valuations of many large private companies. It’s solving current problems — attracting talent cheaply — by creating future problems — large amounts of equity given away — that may never actually occur.”


According to entrepreneurship directors at two elite B-schools, the data generally matches up with what they are hearing and seeing from graduates at their own schools.

“We see a lot of variation based among other things on experience, industry, and function, but the trends are earlier stage companies tend to offer lower base pay and higher equity and later stage companies offer higher base pay and less equity,” says Clare Leinweber, the managing director of Penn Wharton Entrepreneurship.

Vince Ponzo, the managing director of the Lang Entrepreneurship Center at Columbia Business School, says he is “slightly surprised” to see the average stock compensation value “so low” at earlier stages, “since early companies usually give more equity to lure talent to join the company in lieu of high cash compensation. Although, Ponzo believes the average startup equity percentages look more “in line with expectations.”

“While employees are getting sizable and in line — based on stage — equity grants as a percentage of the company, assigning a dollar value to those grants for purposes of this survey is somewhat pointless since the earlier stage companies will almost always have a very small price per share,” Ponzo explains. “What is surprising is that the ‘Average of Stock Compensation’ dollar value does not go up by stage in this data. You would expect that as companies raise more money and get to later stages, their equity would carry a higher valuation which would make that number higher.”