VC Jenny Fielding (seen in the image above), co-initiator of Everywhere Ventures and previous Techstars director, was essentially teasing on X when she shared, “Do people have intense feelings about pre-seed entrepreneurs employing EAs for scheduling help? Just curious.”

Fielding acknowledged the post was “somewhat edge-taking,” she conveyed to TechCrunch, yet it led to a broad discussion. Certain individuals proposed that early-phase entrepreneurs could opt for AI executive assistants. Others were offended that a VC inferred they shouldn’t hire an individual assistant, even at the nascent stages of their venture.

Fielding’s message, however, emphasized that entrepreneurs still retain misconceptions from the plentiful funding period of 2020-2021 about optimal monetary management, particularly in a startup’s initial years, when profit is minimal. That’s the phase when businesses should be concentrating on foundational steps to create a product that customers would purchase. 

“Being a founder myself, I launched two enterprises,” she remarked. “Later, I dedicated seven and a half years at Techstars, genuinely aiding very nascent companies.” Thus, she endeavors to “provide founders with the genuine wisdom they require, not the vague details,” she chuckled.

Despite most seed investors, Fielding included, feeling entrepreneurs should allocate their raised funds “as they see fit,” early-stage financial backers remain observant of founders’ financial stewarding, whether or not the VC primarily acts as a silent stakeholder.

“We place investments at the most initial phases. We abstain from taking board roles. We’re entrusting these finances to the entrepreneurs. And so, indeed, we review the financial plan, and we conduct discussions with them quarterly,” Fielding stated. 

These evaluations will become prominent when the startup seeks to obtain its following funding round and desires its seed/pre-seed financiers to present them glowing intros and high endorsements to subsequent investors.

Thus, although executive assistants can be incredibly useful in well-established firms, they are also administrative overhead roles — not contributors aiding in creating and backing the initial product.

Aside from an EA for the CEO, there are additional positions in an emerging startup that could signal a “cause for concern” to investors: COO and CFO. 

“Frequently, it’s a third co-initiator unsure of their position,” she noted, emphasizing that third-wheel co-founders can be “high-cost” both in equity and pay. “You’ve got to create a product and acquire clients. I’m not convinced you require the elaborate setup of a CFO and COO.” 

This leads to addressing salary matters. This is another domain where initial investors might remain silent but are observant. Fielding actually ceased a deal after scrutinizing a startup’s expenses and noticing that “the founder was allocating $300,000 to themselves,” she shared.

While such compensation might just match their former Google or Microsoft salary level, an appropriate compensation at the pre-seed phase is from $85,000 to $125,000, she advised. It concerns the arithmetic. Even if a founder managed to secure a robust $1 million pre-seed but opted to pay themselves $200,000, a substantial fifth of the funds is already consumed.

“We’re not suggesting you must accept $100,000 indefinitely,” she cautioned, but in the early stage, “the cash isn’t there to squander.”

This narrative was initially published on November 24, 2024.