The glamor of startup life doesn't always translate to a big paycheck, and that's especially true in D.C. according to a new report from Washington, D.C.'s Office of Revenue Analysis.
While shows like Silicon Valley depict a quick transition from shoestring budget startup to a playground of lavish perks, that's not the case in real life, even in the Bay Area and let alone in D.C. The actual salaries for more established industries in Washington offer a much better chance at a healthy bank balance, versus an unlikely shift to where a startup's stock turns you into a millionaire.
According to the data, D.C. offers a notably lower average salary compared to working in any other industry, just 61.2 percent of the total average. Of course, D.C. is not unique in offering a lower average salary at startups, but the difference is wide enough to probably give many people pause in deciding what kind of career they want to pursue in D.C. It's a little better for those aged 25 to 34, with overall lower wages making startup pay just 72.7 percent of the average. It's worth noting that the report defines a startup simply as a company less than four years old, which leaves out plenty of companies that might still be startups even after that point and have received further rounds of venture funding.
As for why there is such a difference in pay gap from city to city, there are several factors at work. D.C. and New York are expensive to live in, so well-established companies have to offer enough money to make it feasible to live there at all. And the government and all its attendant industries have a huge influence in D.C., affecting wages far more than the startup scene even as it grows. San Francisco simply has a lot more focus on startups.
"The difference in pay ratios for start-up pay likely reflects a more vibrant start up economy in San Francisco and Austin, compared to more traditional career paths in established financial and legal services firms in DC and NYC," the report concludes. "The causes for this could include - stronger ties to venture capital funding that provide greater financing to startups, or simply stronger competition for young talent among startups in San Francisco and Austin."
Of course, people have plenty of reasons beyond the paycheck to join a startup. They might care about its particular mission or really enjoy the work to an extent that makes the lower pay worthwhile. Or maybe they are hoping to be there when a startup hits the big time and the stock options make a year of surviving on ramen worthwhile.
