Comment by to11mtm

300K ARR means you get 300K in annual recurring revenue.

Subtract costs for employees. Which, given current economy and inflation, that gets you a founder scraping on their savings, one or two other people (remember that if you're paying someone unless it's totally offshored through a house which has it's own inflation, you have other factors) and then your own taxes... yeah... much more than that and you are in the black.

As a general factor I keep in mind, when I worked at a 'normal' but toxic place before I was an actual software engineer, my manager's rules were something like '40 percent L2R' (might have been lower) for in-house employees and 70- 80% L2R for contractors.

IOW, for every dollar billed for an actual employee, we paid the employee 40 cents. For every dollar billed for a contractor, we paid them 70-80 cents.

I've heard similar figures from others (e.x. 'in house employee has a real cost of 1.5-2x their actual pay').

And yes it sucks and yes the structure at least here in the US is a factor.