Tech Compensation: How the Venture Capital Executive Compensation SURVEY (VCECS) embarrasses founders and hurts operators. Plus what we can all do about it.

Mar 25

A lot of times I write articles that I believe will help my fellow Operators.

A lot of times I write articles that I believe will help my fellow founders.

But in this case, I am writing this article to help both… and to save me a lot of time.

TL-DR

This is a polarizing topic. My post is meant to start a dialogue by addressing the tension that is caused by existing executive compensation data with regard to the Venture Capital Executive Compensation Survey (VCECS). I believe there is work to do on all sides (founders, Operators, VC’s, etc) to truly understand the “market,” improve negotiations across the industry, and help Founders and Operators find a win-win. We owe it to ourselves to put in the time and work.

For an industry that prides itself on being so “data-driven,” reinventing the future continuously, and challenging the status quo, it’s as if we forgot to do our homework as it relates to this study in particular. Because if anyone, from an L1 employee to your CEO, were to actually spend ten minutes analyzing this data outside of San Francisco, they’d realize how non-foundational it really is.

The data is incredibly thin. It has absolutely zero sense for the quality of the companies (high growth? flat? declining?). And absolutely zero sense for the quality of the employee/Operator listed (A player? B player? F player?). The result is not only a reversion to the mean, but often times the creation of a contorted picture weighting negotiations in one direction.

As a founder myself, and as a Product Operator (Drizly, Wayfair), I get it. We’re all trying to build the best executive teams possible. And we need data to do it. To make the right decision. But, this means first having the data on where the win-win actually is. And second, it means applying more rigorous analysis… analysis that you would expect out of your own Head of Analytics and executive team members, for example 😉.

So what can we do to be better? A few things. We can (1) improve the volume and accuracy of data points from both Founders AND Operators, (2) take into account quality of the company and the quality of the Operator, and (3) remove the prevalent “us vs. them” mindset in negotiations.

A win-win exists, my friends. Founders who are finding it are stacking their decks with 10x the A+ talent. I know b/c I see it every single day. And in the fight for not just talent, but A player talent… to the victor go the spoils.

We must do better. So let’s do it together, shall we?

———

Details

This post includes:

What the Venture Capital Executive Compensation Survey (VCECS) is and how it is used?
My opinions on the VCECS, including real examples to illustrate.
And last but not least: Actual solutions and improvements to do better.

What is the Venture Capital Executive Compensation Survey (VCECS)

When it comes to executive compensation alignment between founders and operators, there is little data that exists out there in the wild. The topic is shrouded in secrecy. The topic brings defensive attitudes to the forefront. And the topic is incredibly polarizing. The result? Conversations and negotiations around executive compensation are often unnecessarily confrontational, frequently bizarre, and sometimes downright nasty.

Paid for by VC firms and sponsors, the VCECS is an aggregation of portfolio companies’ executive compensation data that is provided by companies and then disseminated to companies who participated. You show me yours… I’ll show you mine type stuff. It is still touted today as one of the best somewhat private (but often times public) sources of executive compensation data benchmarking across tech companies from venture capital firms globally. In the world of Payscale, Salary.com, and others, the VCECS is still the most often quoted that I hear in town as it relates to exec comp.

The VCECS has been around for over a decade. I used it as a reference point on executive comp as a cofounder back in 2010 when we raised venture and started building out our team. It’s been around. It’s well known. It’s ingrained in the culture of executive comp, and it’s referenced heavily still to this day in setting compensation expectations and in negotiations by many founders. As a founder, you want to know: “What a CMO should be paid?”… let’s see what the VCECS says. Ask a VC, “What a VP Product should be paid?”… let’s see what the VCECS says. Let’s see, indeed.

Let’s be really clear… the VCECS states on its website that they have two customers: (1) Venture firms, and (2) Portfolio Companies. And just like any good Product Manager knows, you have to focus on your customer. Always. Which is why I don’t blame the VCECS one ounce… one iota. They are doing what they should be doing: focusing on their customer.

But… there’s also a third customer they aren’t acknowledging or talking about on their website: the Executive. The Operator. The person who actually receives the output of these numbers and who is about to do a good amount of the heavy lifting. This study is a quintessential example of a topic that has been designed not to be questioned. It puts too much power in the hands of Founders & VC’s, and it ends up hurting Operators and employees. After all… how could a front page to a website that has the support and sponsorship of all of the 100+ name brand VC’son their homepage be questioned (refer to the very bottom of this post)? That’s a lot of big-name venture firms on there, with implied weight. But do the numbers on the scale match the lbs? I obviously have opinions on that…

Visual of the VCECS Study from their public website

The VCECS study has three big problems:

Incredibly thin data for Boston, NYC, and anything outside of The Valley (CAPS = respect). And when I say thin… I mean INCREDIBLY thinnnn data… particularly when applying more than a simple geography filter (like… Boston).
Absolutely zero sense for the quality of the companies (some of them may be high growth… some may be total shit with YOY declining growth).
Absolutely zero sense for the quality of the employee/Operator listed (as we all know… there’s a big difference between Tom Brady and his seven rings and Cam Newton with zero rings… Side note: Cam… we’re all pulling for you this year… but needless to say… you’re no Tommy boy).

The result of the above is threefold:

It sets unrealistic expectations on compensation in the mind of the Founder from the start of negotiations… an anchor that is not anchored in sand… not anchored in rocks… but anchored in giant boulders… attempting to hook onto some form of foundation under the sea and not knowing that the anchor is drifting two feet above the bottom. If you anchor to numbers too firmly, you’ll miss other data points. You won’t open your ears and mind to listen. You’ll remain closed off. To win, any good negotiator must be open to new information and be flexible.
It forces founders to manipulate the data using filters that back their narrative. I’ve seen many founders do almost anything to get the data to read what they want it to read… rather than put an ounce of effort into seeing what the market is actually paying by asking others around town (i.e. picking up their iPhone and calling/texting/slacking/emailing/etc… you get the idea… people in that role today). You don’t like the output you see in the study??? Simply open up the filters and close others. If you’re a Series A company and the data is thin… you’ll expand to Series B companies. If you’re an NYC company and the data is thin, expand to markets like Boston where comp is lower. If your revenue is $25-$50 MM, expand down to companies that include $0-$10 MM to decrease salaries. You get the idea. Just remember this: If you were the Head of Product or Head of Analytics at a company and pulled that shit, you’d not only embarrass yourself in front of any analytical-minded person within your own company… but you probably wouldn’t last long and be fired for not knowing what you’re doing. Picture you were presenting this data in front of your entire company the same way you as CEO and all department heads do in your all hands: would your presentation be rock solid?… or… would it be an embarrassment? (One last point: A massive amount of Operators have the same VCECS you’re looking at…. and the same filters. The VCECS is not a well-kept secret…)
It makes for very bizarre negotiation conversations in which the company is valued significantly more than the candidate. As a result of the above, often times the focus of these negotiation conversations, puts overwhelming weight/value/power in the hands of the company and an overwhelmingly little emphasis on the candidate. My personal opinion: Any hire you ever make is a 50/50 partnership in the same way any marriage to a significant other is a 50/50 partnership. If one partner dominates control, guess what typically happens: divorce. “But, as a company, you have a sea of candidates, Durkin!” And in fact, you do. A sea of A players, B players, C, D, and F players. In fact, I even know some G players out there who are so toxic to a company’s culture they have literally personally destroyed companies. Put your people first. It will work in your favor.

Problem #1: The data is incredibly thin

I’d be a little shithead if I didn’t give some examples to the points I mention above… so here they are.

First, let’s understand the structure of the report. The VCECS has many filters you can slice data by: Title, Founder (yes/no), Status (full-time/part-time), Region (Boston, NYC, San Fran, Canada, Israel, Germany, etc), base salary, bonus, fully diluted share %, year of founding, industry (consumer/enterprise), development stage (profitable vs. shipping product), funding rounds (A, B, C, D, 5+ rounds of funding), capital raised (buckets between $0 and $500+M), revenues (between pre-revenue and $300+M), and headcount.

These are some great filters, you may say. And I agree. This list of filters should be able to get us some great ballpark numbers. And to be honest… if I were designing this product from scratch, I would net out in a similar space.

However.

Let’s go through a few examples and put the product to the test. Let’s say you’re the Founder & CEO of ACME Co and you want to know what to pay a number of executives you want to hire. Let’s dive in and see what the data says.

VP Product

We are going to apply just TWO filters out of the 15.

Geography: Boston (because your company is in Boston).
Stage: Series A (because you just raised your Series A of $8 Million).

The above two filters should give us a ballpark, no? One would think that these two filter types (geography and stage) are probably the most common/important from the list of 15 filters above.

Here’s what the data says: There are only five results. Yes… five. $180k & 5.84%, $160k & 2.37%, $185k and 0.44%, $165k and 0.77%, and $190k and 1%.

Two of these five are founders: 5.84% and 2.37%. The remaining three are not founders, but instead hired employees. One is at a Series A company with $10M-$25M and a headcount of 100-200 employees. The other two are at Series A companies in the range of 51-100 employees… one with revenues of $0-$3 MM, and one with revenues of $10-$25M.
Of the five, the two founders are at consumer tech companies. And of the remaining three employees… two of them are enterprise companies and one works in Clean Tech.

Let’s dig in slightly more… Based on the data above if you are not a founder (a regular executive) who is being courted by a consumer tech, Series A company in Boston… there areeee… ZERO… yes… I repeat… ZERO data points to help you. Well god damn… let’s expand the filters then. Let’s expand beyond Boston and also apply the “North East” geography filter. The result? Still… zero. Damn. Ok… let’s expand further. Let’s include New York City and the Tri-state area. I mean… it’s New York… just a four-hour drive from Boston. There’s got to be data including NYC for the intersection of consumer tech and Series A companies who aren’t founders. Guess how many data points we now have? Four. Four data points. Shoot… that’s not a lot of data points. Let’s expand it even further. Let’s include Series B companies. I mean… nowadays in 2021… Series A… Series B…. potato potaughto (you know)… the sizes of the rounds are so variable… why don’t we just group them all together! The result: Nine data points. Nine. INCLUDING four employees with these salaries: $265k BASE, $240k base, $230k base, and $220k base.

Very interesting. I mean… that’s pretty widespread wouldn’t you say? From the $165k minimum of that one employee of three we had above and the $265,000 base salary of the other person… a one-hundred-fucking-thousand dollar differential. Wouldn’t you say that’s a bit… wide? But… but… the VCECS study has been around for a long time. Certainly the above must be wrong… certainly you must be applying the wrong filters, Durkin! There’s got to be some reason to explain this. Guess what: There isn’t. It’s accurate. And as a guy who ran Search & Discovery at Wayfair and made filters my baby… trust me… the above is true. And let me remind you… if you were to filter by a 4th… a 5th… a 6th… ya… the data comes back with what you would now expect: a goose egg.

Soooo let’s include Enterprise as a filter instead of just Consumer. K. You got it. The average salary for a non-cofounder VP Product in Boston at a Series A or B company: $209,079. That’s a hell of a lot different than the consumer salaries we read earlier. That’s a 10-20% increase.

So, again, you’re the CEO… what is your offer? I’m guessing you’ll say $175k base and 0.75% equity. And you wouldn’t be wrong… $175k is the average of those five salaries, and 0.75% is between the 0.44% and 1%, so screw it. You wouldn’t be wrong… but… you also wouldn’t be right (based on the data I have from dozens of consumer VP Product people in the Boston and tri-state area). Especially depending on the caliber of the candidate.

“Well shit,” you say. Let’s open it up a bit more… there’s plenty of data in this thing. Let’s include San Francisco. Ok, you got it.

VP Product + San Fran + Series A filter: 39 data points.
VP Product + San Fran + Series B filter: 55 data points.

That’s a hell of a different data pool (94 data points total). We did it! Plenty of data! Except for one issue… the average base salary for a VP Product in San Francisco is $229,736 (and we’re talking VP… not even CPO). Average equity… close to 1% (btw… the 1% is accurate for Series A in Boston… so that’s great… but the base is quite frankly, high for the average of Series A & B companies in Boston).

What’s a guy/gal/they to do? Do I, as CEO, use four data points in Boston to make my decision, or do I use many more data points from San Fran at a 20-30% increase in base salary? I mean… that’s a lot of money, am I right?

I’ll tell you what you can do in an upcoming section…

But first, I’ll illustrate a few more examples below.

Because I’m from the east coast (Boston), I will have the geography set to include “Boston”, the “Northeast”, and the “Tri-State Area” (which includes NYC). As soon as you apply west coast filters… the numbers get… “wicked high” (basically unusable for Boston). But we’ll include NYC, even though they too are also high compared to Beantown.

Want to know how many data points you’ll have for a VP of Engineering at Series A and B companies? Seven. Three of which are in Boston. Here are the salaries listed (look at this range): $400,000, $281k, $275k, $250k, $240k, $190k, $180k. Want to know the equity ranges? 0.09%, 0.14%, 0.33%, 0.38%, 0.50%, 1.35%, and 4.7%. Well, they must have revenues and funding right? In fact, they do! The majority of these have raised >$25 Million and have >$25 Million in revenue. Nice! So now let me ask you a question: You’re the Founder/CEO of your business looking to hire a VP of Engineering. What do you do? Based on the data above (and again, remember… we applied two basic filters here), what is the offer you’re going to make? $275k and 0.5%? $275k and 1%? $190k and 1%? $190k and 0.5%? I’ll tell you what… whatever you decide to go in with as an offer is going to have some big implications now just starting out in your negotiation, but also one really important thing: The future outcome for the Operator/VP Engineering and the money she/he/they stands to make. The decision you make here will influence THAT person’s life in a material way… a massively material way… or a much smaller material way.
Want to know what you should pay an incoming VP of Finance at Series C companies? Five data points. Here you go. $225k & 0.2%, $237k and 0.47%, $245k and 0.7%, $130k (ouch) and 0.23%, $245k and 0.04% (ouch, ouch, ouch). All of these companies have >$25 Million in revenue. So here’s the million/billion dollar question: What are you going to offer? $240k seems reasonable… but what about equity? What do you do with regard to equity? Tricky, tricky indeed. Well! GOOD LUCK!

I could go on and on. Note: (Again: San Francisco has A LOT of data in the study and is actually very useful indeed. But Boston founders don’t like paying San Fran prices… I can tell you that right now. Perhaps the remote world will change that, but when you’re talking 20-35%+ increases… ya… I think it may take a while).

Problem #2: The VCECS has absolutely zero sense for the quality of the companies

Quality. Matters.

The quality of the restaurant you just ordered dinner off of Uber Eats matters. The quality of the contracting company you hired to renovate your kitchen matters. The quality of the car company you just bought your brand new car from matters. When it comes to companies... Quality. Matters.

In tech, I assess the quality of a company on three things: (1) Leadership, (2) Growth, and (3) Culture. All of these can actually be measured based on a number of different metrics… some are private, like a leadership team’s performance review scores from their direct reports and peers and the YOY growth rates to a business, and some are more public, like retention rates of employees by mining Linkedin. (Yes… I do this… and yes… it’s fascinating hahaha).

My point is: The VCECS has no presentation layer of quality. For all you know, the five companies listing the five VP Product roles above all have (1) Negative or flat growth, (2) Leadership changes that would make the Jets look good, and (3) Cultures so miserable that average employee retention rates are 1.1 years (below average).

Example: How would you rate the quality of CompanyX founded in 2011, with $20 MM in funding, and only $0-3 MM in revenue? Is that an A-grade company attracting A-grade players? Were they simply too early to market? Are they in a rebuilding year like the Sox are now? Are they about to hit growth mode because they pivoted into a new market that is ready to explode? No clue. But I know one thing: If you’re including that datapoint in your analysis for your own company founded in 2019 with $20 MM in funding and $0-3MM in revenue… entertain the idea that the probability of the people on the executive team at CompanyX not being A+ talent is greater than 90% (harsh… judgemental… ultra critical… I know). And entertain the idea that the executives at CompanyX are likely either being underpaid (because they are B players) or overpaid (because the company isn’t growing and needs to overpay for talent). But after all… you’ll never know… I’ll never know… we’ll never know.

I’ll fill you in on a little secret: A players go to A companies. B players go to B companies. A players follow A leadership. A players do not stay around long with B and C and D and F grade companies.

So here’s a question: Of the five VP Finance data points in the example above… which ones are playing at A companies? Guess what… you don’t know. No one knows. Interesting… isn’t it?

This brings us to point number three…

Problem #3: The VCECS has absolutely zero sense for the quality of the executive

Question for you: Of the five VP Product execs listed above… how good are they?

Are they A players? Do they win?

Have they demonstrated they can win in the past either through scaling a high-growth company? Running a profitable business? Leading a company and team through an IPO? Being a successful solo-preneuer? All of the above? None of the above? (Note: I’m not one of those people who judge success by how many IPOs or exits you’ve had… I run a nice, small, profitable business… and I love it).

Hypothetically, if all of the VP of Product execs listed above were B players… horrible managers… and known in Boston as being overrated, unable to deliver results, and genuine pains in the asses to work with… do you think that that would be important to know?

Or is market… market?

The reality of the VCECS study (at no fault of their own) is that the data is the average of the average. Meaning: if you are to offer a potential executive the average salary listed in the VCECS study for that role, you are not only putting forth the market average… but the player average. Think of it this way again: “Quarterback” is a position in football. Based on data from January 2021, 34 NFL quarterbacks make at least $5 Million a year in salary. 17 make at least $20 Million. Patrick Mahomes makes $45 Million a year. How’s that for a spread? haha. Now… if this data was put in the format of the VCECS comp study, you would likely offer Patrick Mahomes something in the ballpark of $10 Million. Now… would you?

I would hope not for your sake. Now, I know, I know… the amount of capital you have isn’t limitless. We can’t all hire the Patrick Mahomes of the world every single time. But, my point still remains: Understand that the numbers you are looking at in the VCECS do not convey any degree of quality. But guess what? There’s a way to figure that out… and it’s just a phone call away…

Solutions: Things we can do to do better

Now, “Durkin,” you say. “What can we do about this? This is pretty eye-opening shit! I always knew in the back of my head that that VCECS thing had really thin data and didn’t take into account quality, but what can we do? I feel like I’m getting fucked here.”

As Founders, we can do better. We can:

Push on your venture firms to encourage more companies and teams to provide the data to the VCECS. Despite what you think, I’m not anti-VCECS. I think it’s an overhyped tool with super thin data and very little visibility into quality, but it’s better than nothing. Imagine if the VCECS had 10x, 25x, and 50x the data on each role today, like I do! It would be a great thing for everyone! Imagine if they spent time thinking through how to assess the quality and incorporate that into the study (ex: include YOY growth rate changes, without disclosing the name of the company, as a starter)? I wouldn’t have had to write this blog post. And you wouldn’t have had to read it. Think of the hours saved in all of our lives!
Spend more time getting accurate data points. Guys… I’m a founder. I get it. I’m also an Operator, having led Product teams at high-growth companies and my own venture-backed startup. I know you want to do what’s best for your business. I know you want to hire the best talent. I know you want a good deal. And I know you want everyone to be happy and productive, driving fast, smart, and hard towards your vision. BUT…. remember this: Operators talk. We ALL talk. As the former Head of Product at Drizly, I knew what over 50 CPO’s, VP Product, and Heads of Product, were making in town. How did I know this? It’s pretty simple… I asked. I asked: “What are you paid right now in base, bonus, and equity?” And guess what: They told me. And guess what else… I’m not an anomaly. ALL Operators have friends who are peers at their level in town. Whether you’re in Boston, NYC, the Valley, or CityXYZ. Everyone talks. So, as a Founder, don’t embarrass yourself by quoting a study (paid for by the venture capitalists themselves) when the most accurate data is simply a few phone calls away. Any rational person who has used the VCECS study knows that the data is thin in Boston and NYC. Any rational person who has used it knows that it is “one data point in a sea of many.” But, if you’re going to quote the VCECS as the rationale as to why Person X should receive Salary&Equity Y… don’t cling to it like Rose on that door in Titanic. “I’ll never let go” is for that movie and that movie alone… not for the VCECS. (RIP Jack.)
Encourage candidates to gather their own data points and bring those to the table: If you’re a founder, use this line when discussing executive compensation with a candidate: “Tony. I love ya man. We’re excited about you and we want to make you an offer. But before we do, feel free to bring me examples of comparable compensation data points from your own network. I have a good idea of what the role should be pegged at from my own network, but I’m totally open to hearing about what data you’re able to gather so that we can come to a healthy agreement.” If you’re hiring a VP of Engineering, ask that candidate to ping their network. Obviously, that candidate should check to make sure the other peer VP Engineering is ok with him/her/they using them as an example (and ideally their name to put a face to the number to make it really, really real). But, I totally get that some people aren’t comfortable sharing their names like that. By and large, from what I’ve seen, candidates rarely lie to employers about what market-comp data they get from their peers. It’s poor form to lie in negotiations. And quite frankly most people suck at lying and bluffing. A good negotiator can sniff this out right away and call out the person on it (and probably kill the deal). Here’s my point to you: If that employee gathers better than you… you need to… wait for it… wait for it…. trust them. You’re the Founder. And if someone else is able to gather better data than you… well shit man… checkmate. My advice to founders: don’t get caught in checkmate. My advice to Operators: don’t get caught in checkmate. You feel me?

As Operators, we can also do better. We can:

Talk to our peers and gather live time data points. It’s that simple. Call up your peers and ask them directly what they make in base, bonus, equity (and other benefits). And tell them what you make. Trade information. Don’t be shy. It benefits BOTH OF YOU. If you want to get data… do the same thing I did… ask peers who trust you and who you trust. And if you don’t trust anyone and no one trusts you… you’ve got some work to do. Build a network. Build YOUR network. Be intentional. Put in the work. Or you can take the easy way out and let a study, created by people YOU don’t know and who don’t know YOU, decide what YOU should be paid in YOUR life. You get it? (Total sidebar and interesting fact: As a result of COVID, the markets rallying, and the insane amount of trillions of dollars in the market, market compensation has actually risen at a substantially higher rate over the past 12 months than any other year over the past four years. No study that is 6, 12, or 18+ months old will account for that). There’s no better data than live time data. So go and ask for it. Be tenacious. Be unstoppable.
Enlist connectors in your city to give you input on your #s. I have A LOT of data. And when I say A LOT, I mean a fucking lot of data. I have about 10x more data (particularly for consumer tech) in Boston than the VCECS. And even better, my data has quality marks associated with each company and each person. My algorithm takes into account my opinions, my Operators’ opinions, reference peer opinions, assessments given to candidates, and their own personal evaluations of themselves (shockingly accurate btw b/c they are talking to me about this, not their boss in which they want a promotion/raise). Everyone is graded. Everything is weighted. It’s a beautiful thing. Now, some important points: I do not sell my data. I never expose the names of people and their data unless they give me the go-ahead to do so. And my data is not publically available. “But Durkin, why not make it public like the VCECS?” Because it’s mine. The same way your car is yours, and your house is yours. This is mine. And because it’s for my network of Operators… the people who bring value to the group and to the vision for what we are building. I exclude data from companies that are not high-growth b/c the customers I service, both on the Operator side and Founder side, are high-growth companies. I do not include data from people I believe are average, because my customers are not average. If you want to see what the average of companies pay and the average of players, use Payscale… or the VCECS. There will be a time someday in which a product exists that will convey thick, quality data, but that time is not now.
Stand up for yourself. If you know you are an A+ player: back it up with specifics and say it. You don’t get in life what you don’t ask for. And you won’t get your ask without specifics. Get the specifics, know the worth of the role in the market, but most importantly: Know YOUR worth in the market. And remember this: only 5% of people are A+. 10% are A’s. 20% are B’s. And the rest are C’s. That means, there’s an overwhelming probability that if you’re reading this… you are not an A player. Draconian, I know. But guess what: I’m not an A+ player Head of Product. I’m not, and I know that. And I need to improve to get better. I am, however, an A player People Operator. Why? Because I’ve put in my 30,000 hours, and it’s what I read and learn about all day long (and crypto 😉). No one will be better than me in this domain. I’m sure of it. Because I’m unstoppably determined to be the Michael Jordan of the space. I don’t just want to play in the game… I want to transform this entire industry. Period.

At the end of the day, there’s a difference between Brady and Cam Newton. If you’re Cam… don’t pretend your Brady. And if you’re Brady… get…paid. Because guess what? If New England isn’t going to pay you… someone else will. And we all know the result of decisions like that… 🤦

In Summary

As most of you know, here at The Operators we are repeat founders and high-growth Operators who represent, coach and manage the lives of other top Operators in Boston. People helping people. We take care of their lives the same way Lebron’s agent, manager, and coach allow him to focus solely on basketball. We open doors. We close deals. We manage finances. We take care of it all. And one massive part of the business is helping people find their next big opportunity, and more specifically, negotiating the best deal possible for our clients. As a result of this, we’ve been in the room in HUNDREDS of executive compensation negotiations. We’ve seen a thing or two. And there’s one thing we have to address now, or forever hold our peace. ✌️

Just keep in mind my earlier point: the VCECS states on their website that they have two customers: (1) Venture firms, and (2) Portfolio Companies. That third customer (the executive) is just as important: Operators. Executives.

The amount of weight that this VCECS study holds in the eyes of many founders (particularly young founders) is simply too much. The data is thin. It has no comprehension and visibility layer of the quality of the company. And it has no comprehension and visibility layer of the quality of employees. Don’t be the founder who dies on the VCECS hill. Use the study as A datapoint in your arsenal of data points… but not THE datapoint. Go and talk to Operators, and take quality into account.

I’ll leave you with this. Imagine a world where Operators produced their own study… a consumer/candidate's first approach to the problem. Where the data was 10-100x thicker. Where there was a lens of self-assessed and peer-assessed quality of not just companies but the people as well. And imagine a world where that transparency benefitted not just Operators, but founders and VC’s as well.

What a world that would be.

That world is coming my friends.

Just. You. Wait.

The sponsors of the VCECS: