Rethinking Early-Stage Startup Spending: Insights from VC Jenny Fielding
Recently, Jenny Fielding, co-founder of Everywhere Ventures and a former managing director at Techstars, stirred up quite the conversation on social media platform X. Her post, which humorously questioned the necessity of pre-seed founders employing executive assistants (EAs) for scheduling, was more than just a bit of snark. It ignited a lively debate about the financial priorities of early-stage startups.
Fielding admitted to TechCrunch that her post was intentionally provocative. She wanted to shed light on how some founders might still be clinging to outdated spending habits from the funding boom of 2020-2021. In those days, cash flowed more freely, but today’s climate demands sharper focus on revenue generation and product development.
“I was a founder. I started two companies,” Fielding shared. “Then I spent seven and a half years at Techstars, really helping very formative companies.” Her aim is to give founders “the real information they need, not the fuzzy stuff,” she laughed.
{Jenny Fielding}
The conversation around early-stage spending often centers on how best to allocate limited resources. While many seed investors, Fielding included, advocate for founders spending their funds as they see fit, there’s an underlying expectation for prudent cash management. This becomes especially relevant when startups seek further investment rounds and require glowing endorsements from their initial investors.
Executive Assistants: A Necessary Expense or Operational Overhead?
It’s not that executive assistants have no place in startups; rather, their role is better suited for more established firms where they can significantly contribute without straining resources. At the pre-seed level, however, every dollar should ideally support product development and customer acquisition.
Red Flags in Startup Titles
- COO and CFO roles at early stages can be concerning for investors.
- Third co-founders often lack a clear role and can represent costly overhead.
“You need to develop a product and then get customers. Not really sure you need the organizational structure of a CFO and COO,” Fielding noted.
{Jenny Fielding}
The Salary Debate
Salaries at the pre-seed stage are another critical area scrutinized by investors. Fielding emphasized reasonable compensation, suggesting that founder salaries range between $85,000 to $125,000 initially. She recounted how excessive salaries have led her to reconsider investments.
“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.”
{Jenny Fielding}
Fielding’s insights underscore a crucial message for founders: Strategic financial management is paramount when setting up a startup for long-term success. As you navigate these early stages, remember that every decision counts toward building a sustainable business foundation.
