VC Jenny Fielding (pictured above), co-founder of Everywhere Ventures and former Techstars managing director, was basically trolling on X when she posted, “Y’all have strong opinions about pre-seed founders who have EAs to help them schedule? Just checking.”
Fielding knew the post was “a little bit snarky,” she told TechCrunch, but it sparked a big conversation. Some people suggested that early-stage founders could simply use AI executive assistants. Others grew affronted that a VC implied that they shouldn’t hire a human to assist, even at the earliest stages of their company.
Fielding’s point, however, was that founders still hold some misconceptions from the excess funding days of 2020-2021 about appropriate cash management, especially during a startup’s early years, when revenue is scarce. That’s when companies should be working on the basics of building a product 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, really helping very formative companies.” So she tries to “give founders the real information they need, not the fuzzy stuff,” she laughed.
While most seed investors, including Fielding, believe founders should spend their raised cash “how they want to,” early-stage VCs will still be judging founders’ cash management, even if the VC is basically a silent partner.
“We invest at the earliest stages. We don’t take board seats. We’re entrusting this cash to founders. And so yeah, we look at the operating budget, and we have calls with them quarterly,” Fielding said.
Those judgments will materialize when the startup needs to raise its next round and wants its seed/pre-seed VCs to give them warm introductions and raving recommendations to the next crop of investors.
So, while executive assistants can be invaluable at established companies, they are also operational overhead positions — not people helping to build and support the early product.
Beyond an EA for the CEO, there other titles at an early-stage startup that can be a “red flag” to VCs: COO and CFO.
“Oftentimes it’s a third co-founder who doesn’t really know where they fit,” she said, adding that third-wheel co-founders can be “very expensive” both in terms of stock and salaries. “You need to develop a product and then get customers. Not really sure you need the organizational structure of a CFO and COO.”
Which brings up the salaries themselves. This is another area where early investors might keep mum but are paying attention. Fielding actually ended a deal when she analyzed the operating expenses of the startup and saw that “the founder was paying himself $300,000,” she said.
While that salary might simply be matching the pay at the previous Google or Microsoft role, a reasonable salary at the pre-seed level is between $85,000 and $125,000, she advised. It’s a matter of the math. Even if a founder has raised a healthy $1 million pre-seed but pays themselves $200,000, they’ve already spent a fifth of the money.
“We’re not saying you should make $100,000 forever,” she warned, but at the early stage, “you just don’t have that cash to burn.”
This story originally published November 24, 2024.