Executive Assistants, High Salaries & Seed VC Triggers

VC Insights on Early-Stage Startup Spending

Everywhere Ventures co-founder and former Techstars managing director, VC Jenny Fielding (shown above), initiated a discussion on X by questioning the practice of pre-seed founders employing executive assistants. Her post inquired, “Do you all hold firm beliefs regarding pre-seed founders who utilize EAs for scheduling purposes? I’m simply making an inquiry.”

Sparking a Debate

Fielding acknowledged the post carried a “somewhat sarcastic tone,” as she conveyed to TechCrunch. However, it successfully ignited a significant conversation. Suggestions arose that founders could instead leverage AI executive assistants. Conversely, some individuals expressed offense at the implication that hiring human assistance was inappropriate, even in a company’s initial phases.

Misconceptions About Cash Management

Fielding clarified that her intention was to highlight lingering misconceptions from the period of abundant funding in 2020-2021 concerning prudent cash management. This is particularly crucial during a startup’s formative years when revenue generation is limited. The primary focus at this stage should be on developing a product that resonates with the market.

Experience-Based Advice

“Having founded two companies myself,” she stated, “and subsequently dedicating seven and a half years to Techstars, assisting emerging companies, I aim to provide founders with practical, actionable information, rather than ambiguous guidance.”

Investor Scrutiny of Spending

While most seed investors, including Fielding, generally allow founders autonomy in allocating their funds, early-stage VCs will still evaluate their financial stewardship, even when operating as largely passive investors.

“We invest at a very early juncture. We typically do not assume board positions. We are placing trust in founders with capital, and therefore, we review operating budgets and conduct quarterly check-ins,” Fielding explained.

Impact on Future Funding

These assessments become particularly relevant when the startup seeks subsequent funding rounds. The willingness of seed/pre-seed VCs to provide positive introductions and strong endorsements to prospective investors is directly influenced by their prior observations of the founder’s financial decisions.

Operational Overhead vs. Product Development

Although executive assistants can prove beneficial within established organizations, they represent an operational expense rather than contributing directly to the creation and refinement of the core product.

Red Flags: Titles and Salaries

Beyond a CEO’s EA, certain roles within an early-stage startup can raise concerns for VCs, notably COO and CFO positions.

“Frequently, this indicates a third co-founder lacking a clearly defined role,” she noted, adding that such individuals can be “financially burdensome” due to equity dilution and salary demands. “The immediate priorities are product development and customer acquisition, not necessarily the complex organizational structure associated with a CFO and COO.”

Founder Salaries Under the Microscope

Founder salaries are another area where investors often remain silent but closely observe. Fielding recounted an instance where she terminated a potential deal after discovering the founder was paying themselves $300,000 annually.

While this figure might align with previous compensation at larger companies like Google or Microsoft, she recommends a reasonable salary range of $85,000 to $125,000 at the pre-seed stage. The financial implications are significant; a $200,000 salary consumes 20% of a $1 million pre-seed round.

Balancing Compensation and Runway

“We aren’t suggesting a permanent salary cap of $100,000,” she clarified, “but at this initial phase, conserving capital is paramount. There simply isn’t room for excessive spending.”

Originally published November 24, 2024.