đ Hi, Iâm Andre and welcome to my weekly newsletter, Data-driven VC. Every Tuesday, I publish âInsightsâ to digest the most relevant startup research & reports, and every Thursday, I publish âEssaysâ that cover hands-on insights about data-driven innovation & AI in VC. Follow along to understand how startup investing becomes more data-driven, why it matters, and what it means for you.
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Welcome to our monthly wrap-up episode where weâll cover Februaryâs most relevant content at the intersection of VC, startups, data, AI & productivity. I read it all so you donât need to - here we gođ
INTERESTING RESEARCH & REPORTSđ
Equity Evolution: Navigating ESOPs in Startup Growth: Sizing Employee Stock Option Pools (ESOP) is crucial to attracting and retaining top talent. Yet, founders oftentimes lack the benchmark of whatâs market standard and whatâs off. Thankfully, Carta ran the numbers for 28k US companies and found:
Negotiation Necessity: ESOP becomes a pivotal point in discussions with VCs, demanding founders to strategically plan their equity distribution to accommodate future hiring needs.
Trend Tracking: An uptick in ESOP utilization reflects the challenges companies face in fundraising, prompting them to extend the life of existing option pools. Interestingly, equity distribution saw a shift, with the first ten hires in recent years receiving more than those in positions 10-100 compared to earlier cohorts.
Vesting Variations: While a 4-year vesting schedule with a one-year cliff remains standard, emerging trends include varied vesting terms and early exercise options.
âď¸ KEY TAKEAWAYS: As startups navigate their growth, managing equity burn becomes as critical as cash burn to prevent valuation and ownership dilution. Depending on initial team composition, ESOP starts with around 13% fully diluted at Pre-Seed and Seed and grows to about 20% fully diluted at unicorn valuation. Full analysis here.
Let's Talk Founder Compensation: Navigating the Early Stages: In a push towards transparency in founder compensation, our friends at Creandum and Slush have released their latest annual report, shedding light on what 700 early-stage founders in Europe are taking home.
Stability in the Face of Uncertainty: Despite the fluctuating economic landscape, founder salaries at early stages remained largely unchanged from 2022 to 2023, with bonuses largely being put on hold, indicating a cautious approach amidst financial uncertainties.
The Geographic and Sectorial Divide: UK founders continue to lead in compensation, although there's a noticeable dip across the board â a trend mirrored in the fintech sector, which, despite a decrease, still stands atop the salary spectrum.
A Closer Look at Equity and Roles: The survey highlights a persistent pay gap and representation issue, with CROs (Chief Revenue Officers) often out-earning CEOs, reflecting the premium placed on revenue generation and commercial acumen in today's market.
âď¸ KEY TAKEAWAYS: Results indicate a cautious compensation climate where early-stage salaries hold steady and bonuses become rare, except in self-funded ventures. The data also casts a spotlight on the UK's continued dominance in founder earnings, despite a universal downturn, and underscores the premium on roles directly tied to revenue generation. Full report here.
INSPIRING TECH IN VC CONTENTđĄ
âBarbarians At The Gateâ newsletter article by Koble highlighting the difference between Data-driven VCs and QuantVCs here
âThe Data Revolution in Venture Capitalâ post by Signature Blog here, explaining why now is the perfect time for investors to start leveraging technology and how data-driven approaches create differentiation and a USP
âThe Great VC Race to Become Data Drivenâ by Joe Perkins from Landscape.VC here, summarizing learnings and insights from 200+ VC conversations about data-driven innovation and the ability to leverage AI for investing
âTop Venture Capital Funds Taking a Data-Driven Approachâ by Gabriel Shin from Landscape.VC here, exploring why data is the foundation to good decisions and which funds are leading the pack
OTHER RESOURCESđď¸
Reddit and Seven Seven Six Co-Founder Alexis Ohanian shares how he productized network as the most valuable thing an early-stage investor can do
I joined the one and only from in his âRun the Numbersâ podcast to discuss âUnderstanding the AI Roadmap for Finance, Strategy, + Opsâ here
EVENTSđ
đĽIâm in advanced stages of planning the first âData-driven VC Virtual Summitâ including panels, keynotes, and workshops with thought leaders from the most advanced VC firms in the industry. Details follow soon. Sign up here to get on the waitlistđĽ
âCatalyzing Change: The Power of AI & Data Science in Revolutionizing VC Fund Dynamicsâ panel with Ties Boukema (Dawn Capital), Konstantin Vinogradov (Runa Capital), Jack Leeney (7GC) , Marek Zamecnik (Vestberry), and myself at the 0100 Conference Feb 29, 2024 in Vienna here
âGenAI Wednesday: AI in the VC Industryâ event Mar 13, 2024 in Munich here
âTECH IN VCâ JOBSđŠâđť
đĽSenior Software Engineer @Earlybird VC in Munich or Berlin heređĽ
đĽSoftware Engineer Intern @Earlybird VC in Munich or Berlin heređĽ
Head of Product @Seven Seven Six Ventures remote here
Tech Lead @All Iron Ventures in Bilbao here
Product Analyst @Balderton based in London here
Analytics Engineer @Dawn Capital in London here
ML master student @EQT in Stockholm here
Data Engineer @Ethereal Ventures remote here
Senior Data Engineer @Growth Equity Firm in the Bay Area here
Data Scientist Internship @Invest NL in Amsterdam here
Analytics Engineer @Tidemark Capital in San Francisco Bay Area here
THIS MONTHâS DATA-DRIVEN VC EPISODESâŽď¸
Essays
#71 âThe Rise of Investment Tech: Startups Revolutionizing Ventureâ
#73 âTools Of The Future: How AI Changes The Way We Interact With Dataâ
#75 âWe Need Your Help for the Data-driven VC Landscape 2024â
#77 âTech Stack In A Box: Your Silver Bullet To Cut Through The Noiseâ
Insights
#72 âPatterns of Successful Startups, Co-Founder Yes or No, Advisor Equity Benchmark & Moreâ
#74 âThe Impact of Founder Education on Startup Successâ
#76 âFounder Salary Benchmark, Sizing ESOP, "Normal" Burn Rates, Optimal Team Size & Moreâ
#78 âThe Impact of Previous Work Experience on Startup Successâ
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