Peter Thiel: The salary of a startup CEO is “incredibly predictive”

In this 2012 interview Thiel explains that one of the best questions an investor can ask is “What is the salary of the CEO?”

In his view, the right answer is less than $150k, even post Series A.

“If you like the people, you like the business model, you like the technology, you like everything. I’ve found that that single question is incredibly predictive because it ends up setting the culture. Are people doing it for equity or cash? It drives the people who are being hired… And you always want to get to this question of motivation. Do people actually believe in what they’re doing?”

He cites Reid Hoffman founding LinkedIn as an example:

“Reid was taking a salary of $15,000 a year. It was the minimum wage so you could get health insurance. And maybe he didn’t need more money [after PayPal], but it was setting the right tone for the company.”

Full video: PandoDaily “Fireside Chat With Peter Thiel” (Nov 2012)

P.S. We’ve put together a YouTube playlist with every Peter Thiel insight we’ve ever shared. You can watch it here: “Best startup advice from Peter Thiel”