VC Jenny Fielding (pictured above), co-founder of Everywhere Ventures and former Techstars managing director, was basically trolling X when she posted“Do you guys have strong opinions about pre-seed founders having EAs to help them schedule? Just checking.”
Fielding told TechCrunch that she knew the post was “a little mean,” but it generated a lot of buzz. Some have suggested that early-stage founders could simply use an AI executive assistant. Others were upset that venture capitalists implied they shouldn't hire people to back their companies, even in their early stages.
However, Fielding pointed out that founders still harbor misconceptions from the 2020-2021 overfunding era about proper capital management, especially in the early stages of a startup when revenue is scarce. It was. At this point, companies need to address the fundamentals of creating products that people want to buy.
“I was a founder. I started two companies,” she said. “Then I spent seven and a half years at Techstars, helping some very formative companies.” As such, she strives to “give founders the real information they need, not the vague stuff.” “Yes,” she laughed.
While most seed investors, including Fielding, believe that founders should do “whatever they want” with the money they raise, early-stage VCs believe that even if the VC is essentially a silent partner, , will determine the founder's financial management.
“We invest early. We don't take board seats. We entrust this cash to founders. And, yes, we look at operating budgets. , we have quarterly calls with them,” Fielding said.
These decisions take shape when a startup needs to raise its next round of funding and hopes that the seed/pre-seed VC will provide a warm introduction and enthusiastic recommendation to the next set of investors. Probably.
So while an executive assistant can be invaluable in an established company, it's also an indirect operational position and not someone who helps build or support the initial product.
Besides the CEO EA, there are other positions in early-stage startups that can be “red flags” for VCs. COO and CFO.
“Often it's the third co-founder who doesn't really know where they fit,” she says, adding that third-wheel co-founders are “very expensive” both in terms of equity and salary. He added that it could be. “You need to develop a product and then acquire customers. I'm not sure we need a CFO-COO organizational structure.”
This generates the salary itself. This is another area that early investors may be keeping quiet about, but are keeping an eye on. In fact, Fielding ended the deal after analyzing the startup's operating costs and realizing that “the founders were paying themselves $300,000,” she said.
She advised that a reasonable salary at the pre-seed level is between $85,000 and $125,000, although that salary may simply be in line with previous salaries at Google and Microsoft. . It's a math problem. Even if a founder raises a healthy $1 million pre-seed and pays himself $200,000, he has already spent a fifth of that money.
“We're not saying we should be making $100,000 forever,” she cautioned, but in the early stages “we just don't have the cash to burn.”
This article was originally published on November 24, 2024.