Startup life can often be something of a bootstrapped affair, as a lack of income results in beans on toast and pizza becoming staple foods. Even among startups that can offer wages to employees, the salaries are often low, with the compensation being that work is flexible, with a high degree of autonomy and variability in the work done, and the promise of lucrative stock options should the startup go places.

Despite this, new research shows that pay plays a big part in the kind of people you can attract to your startup, which in turn has a big part to play in the success of the startup.

The researchers collated data from the US census over a span of nearly two decades to track the earnings of millions of employees. They were then able to control for the age and size of each employer to hone in on the income of workers at startups.

The data surprisingly revealed that the legend of low pay perhaps needs revisiting, as there actually appeared to be a pay premium offered to employees at young startups. At least, that was the picture at the most successful startups. At the least successful, the low-pay legend held true, with those workers earning 25% less than their peers in larger organizations.

For the most successful startups, they actually paid their employees 23% more than the average for their employees, with this seeming to attract a higher caliber employee, which in turn seems to help with the long-term success of the business.

Human capital is undoubtedly important to the success of any startup, and this research is a timely reminder that, as with so much in life, you get what you pay for, and if you want your startup to succeed, then it pays to give employees a bit more than normal.