Hiring marketing · Founders' Marketing Compass

How to compensate your startup's marketing team

You are setting salaries, bonuses, and an option grant for a marketing team, and paying them on leads while sales is paid on closed deals. Every quarter ends with the two teams arguing over which of them a deal belonged to.

Co-founded Fixel and ran it as CEO; Logiq acquired it in 2020. Head of specialization at Ono Academic College.

Drawing on a conversation I had with Maya Szutan Azoulay, Partner at lool ventures, on Founders' Marketing Compass.

How should a startup compensate its marketing team?

Put a meaningful share of the marketing team's pay on a quota it shares with sales, instead of marketing's own results alone. Maya Szutan Azoulay, a partner at lool ventures, favors a double quota that pays marketing and sales on one number, so name that shared number first, then reward both teams when it lands.

Answered by Etgar Shpivak, who advises seed and Series A founders on marketing.

The cleanest way to pay a marketing team is to put a real slice of the pay on one number the team carries jointly with sales.

I talk with founders about this constantly. The pattern I keep seeing is a marketing team that hits every target it was set, while the company still needs far more revenue than those targets delivered.

Pay built on marketing's own numbers rewards that gap. The numbers marketing is measured on aren't the ones the company is short of.

Marketing pay at an early startup gets designed around whatever marketing can count on its own: leads, signups, a rise in traffic. Sales pay gets built around closed revenue. The two plans point at two different numbers. For most of a quarter, nobody has to reconcile them.

Marketing is paid on a number no one can trace to a sale

Marketing pay usually rests on leads or signups, the numbers marketing can produce on its own. Tying those to revenue is the hard part. Attribution, tracing which marketing touch produced a given sale, barely holds together at an early startup.

Maya Szutan Azoulay, a partner at lool ventures, gave me the honest version: "marketing attribution, as we all know, is a very hard nut to crack."

When attribution fails, paying on leads rewards empty volume

When that tracing fails, a bonus paid on marketing's own lead count rewards volume the company may never bank. The pay plan turns that argument into money.

It also sets the two teams against each other. Every quarter, someone has to decide whose work closed the deal, the same standoff that shows up when sales and marketing can't agree which leads were ever real.

One number both teams carry is what stops the blame trading

The way out is a shared quota. A quota is the revenue number a team is measured and paid against. I'd put marketing and sales on one of them, the way Azoulay does, and pay both.

"I would definitely tie a significant portion of the compensation to results," she told me. She would rather run "a double quota, a recognition for marketing and sales team" than keep the two loosely coupled.

A shared number changes what each side optimizes for. Neither team can win by pushing its own metric while the other misses. That is the same reason sales and marketing only pull together when they are set one number to share. The lead-credit fight loses its point, because the credit no longer decides anyone's bonus.

How heavy marketing's slice is depends on how proven its case is

How much marketing earns is a separate question from the structure. I weigh it the way Azoulay does. Her test is "how critical the marketing team is to business success, and how proven that case is."

Where marketing is a function the company can't do without, she pays close to parity with any other team. Where the case is unproven, more of the pay stays in base.

She also loads the marketing leader's salary onto the marketing budget, so you can see what that spend returns.

When a double quota comes too early

Azoulay's shared quota assumes there is a sales quota to share. I would hold it to that condition. At pre-seed or early seed, you are often still educating a market with no repeatable sales motion. Attribution barely exists, so there is nothing to share.

Forcing a double quota that early invents a metric instead of measuring one. I would keep the pay simple until a real sales number is there.

The quarter-end review reads one number instead of a lead

A founder who pays this way walks into the quarter-end review with one number both teams already share. The hour goes to why it moved, rather than who owns the lead that closed.

Marketing's pay and sales' pay now rise and fall together. The meeting stops being a fight over credit and becomes a read on the business.

What to do about it

Tie marketing pay to a shared quota

Marketing's pay now rides partly on sales closing deals it doesn't fully control, and you give up the option of rewarding a strong marketing quarter that sales never converted.

The move

One number both sales and marketing get paid against.

A shared quota beats separate bonus formulas

Maya Szutan Azoulay
Partner at lool ventures

How to do it

  1. 01 Set one shared quota Sales and marketing carry the same revenue number.
  2. 02 Put real pay on it Tie a big share of both teams' bonuses to that number.
  3. 03 Weight it by stage The more proven marketing's case, the closer to parity.

Founders' Marketing Compass · episode 19 · Interviewed by Etgar Shpivak · shpivak.co.il

Source: Maya Szutan Azoulay, Partner at lool ventures, Founders' Marketing Compass episode 19. Download the image

Where this comes from

Maya Szutan Azoulay is a partner at lool ventures, an early-stage fund in Tel Aviv with roughly $200 million under management and around 44 portfolio companies. Before returning to the fund, she launched HiBob's US market as it moved from the UK, then spent about three years at Venn as VP of corporate development, where the company raised over $80 million and shifted from a consumer residential product to a B2B SaaS platform. She was chief operating officer of EX.CO, also known as PlayBuzz, through its move from media revenue to usage-based SaaS. She has led two investments at lool since rejoining the team.

Read the full transcript of this conversation

Founders' Marketing Compass episode 19: Etgar Shpivak interviews Maya Szutan Azoulay, Partner at lool ventures

Loads the video from YouTube. YouTube may set cookies once you play.

Loads the Spotify player and sends your IP address to Spotify.

Founders' Marketing Compass episode 19. Also on Substack, this episode and YouTube.

Questions and answers

The question this page answers

Should marketing pay be tied to performance at a startup?

Pay-for-performance for marketing is the wrong frame at an early startup, because you rarely have clean attribution, tracing which marketing touch produced a given sale, to reward against. Etgar Shpivak, who works with seed and Series A founders, ties the variable pay to a revenue number marketing shares with sales, so the reward rests on a result both teams can see instead of a lead nobody can cleanly assign.

What is a double quota for marketing and sales?

A double quota is a single revenue target that marketing and sales are both measured and paid against, instead of each team carrying its own number. Maya Szutan Azoulay described it on Founders' Marketing Compass as compensating both teams when the shared number lands, which takes the friction over who sourced a given lead off the table.

How much of a marketing team's pay should be variable?

The variable share of a marketing team's pay should track how proven marketing's contribution is, instead of a fixed formula copied from sales. Maya Szutan Azoulay framed it as how critical marketing is to the business. Etgar Shpivak's read is to move marketing toward parity with other teams only once its case is visible, and to keep more of the pay in base until then.

Does marketing compensation change between seed and Series A?

Marketing compensation shifts with stage, but the bigger lever is how proven marketing's contribution is by the time you set it. Maya Szutan Azoulay said that when a company cannot operate without its marketing team, that team is paid close to any other, while at the earliest stage, before the case is made, more of the pay sits in base and less in upside.

Around it

What share of a seed budget should go to marketing?

At seed, marketing running past about 20% of the company budget is a red flag, in Maya Szutan Azoulay's view, because early demand should still be low-friction and largely founder-led. That figure is a starting caution, not a hard rule. The fuller question of how much a startup should spend on marketing depends on stage and business type.

How involved should a founder be in marketing?

A founder stays close to marketing even after hiring a leader for it, because the brand and the company's face are things only the founder can fully own. Asked by Etgar Shpivak what founders get wrong, Maya Szutan Azoulay said marketing is not something you can distance yourself from, and to expect the work to take more of your calendar, not less. The same pull shapes whether the founder should be the public face of the company.

Why does paying a marketing team on lead count backfire?

Because marketing attribution barely holds together at an early startup, and when tracing fails, a bonus paid on lead count rewards volume the company may never bank. It also sets marketing and sales against each other every quarter, arguing over whose work closed the deal. The pay plan turns that argument into money.

How does a shared quota stop the blame game between sales and marketing?

One number both teams carry changes what each side optimizes for. Neither can win by pushing its own metric while the other misses. The fight over who brought the lead loses its point, because the credit no longer decides anyone's bonus. Marketing's pay and sales' pay rise and fall together.

Getting help with this

Should an early-stage startup hire a marketing consultant or wait for a full-time CMO?

An early-stage startup usually starts with a consultant or fractional marketing leader, then brings in a full-time CMO once the sales motion is proven and it can fund a team. Maya Szutan Azoulay favors the lighter arrangement early, since a wrong senior hire is a long, costly mistake to unwind. Etgar Shpivak, a marketing consultant, works directly with seed and Series A founders while they settle which number marketing owns, described on his bio page.

Why put the marketing leader's salary on the marketing budget?

So you can see what the spend on marketing actually returns. When the leader's salary sits inside the marketing budget, it is easier to judge the function against the result it brings. That is Maya Szutan Azoulay's approach, alongside a simple test for how much to pay: how critical marketing is to the business and how proven its case is.

When should you not put marketing and sales on a shared quota?

When there is no real sales quota to share yet. At pre-seed or early seed, the company is often still educating a market with no repeatable sales motion, and attribution barely exists. Forcing a double quota that early invents a metric instead of measuring one. Keep the pay simple until there's a real sales number to share.

Etgar Shpivak, marketing and go-to-market advisor

About Etgar Shpivak

Etgar Shpivak is a marketing consultant for startup founders. He works hands-on with seed and Series A teams on positioning, demand, and hiring the first marketing people. He co-founded Fixel in 2018 and ran it as CEO; Logiq acquired it in 2020. He led marketing at Neema, which reached over 10% market share in its first year. He is Head of specialization at Ono Academic College, where he has taught since 2011. He hosts Founders' Marketing Compass, where he interviews founders, investors, and marketing leaders about the relationship between founders and their marketing teams.

Cite as: Etgar Shpivak, "How to compensate your startup's marketing team", shpivak.co.il, 30 October 2024. https://shpivak.co.il/writing/how-to-compensate-a-marketing-team

Quotes attributed to Maya Szutan Azoulay (Partner, lool ventures) are from their conversation on Founders' Marketing Compass, not Etgar Shpivak's words.

Looking for someone to run your marketing?

Tell me the number the role would own and the budget behind it. I'll tell you whether I'd hire now, bring in an agency or wait.