Executive assistants, high salaries, and other ways early-stage founders will launch seed VC.

VC Jenny Fielding, co-founder of Everywhere Ventures and former Techstars managing director, was basically trolling X. when he published“Do you all have strong opinions about pre-seed founders with EAs to help them plan? I’m just checking.”

Fielding told TechCrunch that he knew the post was “a little edgy,” but it sparked a great conversation. Some people have suggested that early-stage founders could simply use AI executive assistants. Others grew up with hatred a VC meant they didn’t hire a person to help their company even in the earliest stages.

However, Fielding’s point was that founders still have some misconceptions about proper cash management from the hyper-funding days of 2020-2021, especially in the early years of a low-income startup. At this point, companies must work on the basics of creating a product that people want to buy.

“I was the founder. I started two companies,” he said. “Then I spent seven-and-a-half years at Techstars, helping companies that really took shape.” That’s why he tries to “give founders the real information they need, not the fuzzy stuff,” he laughed.

While most seed investors, including Fielding, believe that founders should spend their raised funds “as they see fit,” early-stage VCs will still judge the management of founders’ cash, even if the VC is largely a silent partner.

“We invest at the initial stage. We do not take part in the board of directors. We trust this money to the founders. And so we look at the operating budget and we have dozens of calls every quarter,” Fielding said.

These considerations will come true when a startup needs to raise its next round and investors want their seed/pre-seed VCs to give them warm pitches and glowing recommendations for their next product.

So while executive assistants can be invaluable in established companies, they’re not just the people who help build and support the initial product, they’re key operational responsibilities.

Besides EA for CEO, there are other titles that can be a “red flag” for VCs in an early-stage startup: COO and CFO.

“A lot of times it’s the third co-founder who doesn’t know where they fit in,” he said, adding that third-wheel co-founders can be “very expensive” in terms of both shareholders and salaries. “You have to develop a product and then get customers. I’m not sure you need an organizational structure of CFO and COO.”

Which brings the salaries themselves. This is another area where early investors can keep mum but pay attention. Fielding actually ended the deal when he analyzed the startup’s operating costs and found that “the founder was paying himself $300,000.”

While that salary might just be in line with a previous Google or Microsoft role, a reasonable entry-level salary is between $85,000 and $125,000, he advised. This is a math problem. The founder raised a healthy $1 million, but even with paying himself $200,000, they’ve already spent a fifth of that money.

“We’re not saying you have to make $100,000 forever,” he cautioned, but in the early stages “you don’t have that much money to burn.”

This story was originally published on November 24, 2024.