Our Founder Participation Threshold is Now $250,000 / Year
At TinySeed, we invest in bootstrapped SaaS startups who want to accelerate their growth — through funding, a close-knit batch of like-minded founders, and extensive mentorship from successful SaaS founders.
There are several aspects that make TinySeed different from traditional startup accelerators, one of which is that we allow our founders to choose whether they want to grow their company and sell it, or build it to wild profitability and run it for the long-term.
Our terms allow our founders to remain in control of when they reinvest profits back into their business vs. when they pull them out as dividends (which TinySeed shares in based on our ownership percentage).
The Participation Threshold
To avoid a situation where a founder pays themselves an enormous salary and never takes dividends, we determine a fair participation threshold (affecting salary and other compensation) with the founders, where profits taken out of the company above that amount are considered dividends.
Which leads to a common question: How do we determine the threshold?
Prior to today, we’ve based it on the salary of a software engineer in the closest major city. Now, we are increasing our founder participation threshold to $250,000 USD per founder per year.
TinySeed is a long-term investor in strong alignment with our founders. This change reinforces even further that we are not looking to generate returns before our founders start taking significant profits from their companies. Many TinySeed companies will generate enormous profits during their lifetime, and this is one more way we enable founders to reap the rewards of their hard work.
We’re proud of our unique approach to startup funding, helping bootstrappers scale and achieve profitability while retaining control of their companies. We hope this makes TinySeed even more exciting — if you’re interested in applying, applications are open from today through January 24th.
