Data-driven VC: February Roundup
Where venture capital and data intersect. Every week.
👋 Hi, I’m Andre and welcome to my weekly newsletter, Data-driven VC. Every Tuesday, I publish “Insights” to digest the most relevant startup research & reports, and every Thursday, I publish “Essays” 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.
Brought to you by VESTBERRY - Portfolio Intelligence Platform for data-driven VCs
Picture this: your Fund is in the middle of a fundraising round and a potential investor asks for a 'Fund performance history' before the final decision. How long does it take you to consolidate all the data and turn it into a presentable answer?
Watch this video and learn to prepare your portfolio data, reports, or analyses in minutes. Demonstrate that your team is organized and fully aware of what's happening in your Fund and making a great impression on potential investors.
Welcome to our monthly wrap-up episode where we’ll cover February’s most relevant content at the intersection of VC, startups, data, AI & productivity. I read it all so you don’t need to - here we go👇
INTERESTING RESEARCH & REPORTS📈
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 what’s market standard and what’s 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.
✈️ 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.
