Venture capitalist Jenny Fielding, co-founder of Everywhere Ventures and former Techstars managing director, recently sparked a heated debate on social media when she questioned the necessity of executive assistants for pre-seed founders. Her tongue-in-cheek post, "Y'all have strong opinions about pre-seed founders who have EAs to help them schedule? Just checking," was meant to be "a little bit snarky," but it ended up igniting a crucial conversation about cash management and operational efficiency in early-stage startups.

Some respondents suggested that AI executive assistants could be a viable alternative to human assistants, while others took umbrage with the implication that founders shouldn't hire a human to assist, even at the earliest stages of their company. However, Fielding's point was that founders still hold misconceptions about appropriate cash management, particularly during a startup's early years when revenue is scarce. According to Fielding, this is a critical period when companies should focus on building a product that people want to buy.

As a seasoned founder and investor, Fielding has a unique perspective on the matter. She has founded two companies and spent seven and a half years at Techstars, helping formative companies grow. Her goal is to provide founders with "real information they need, not the fuzzy stuff." Fielding believes that early-stage VCs, including herself, will still be judging founders' cash management, even if they don't take board seats. This scrutiny will come into play when the startup needs to raise its next round and wants its seed/pre-seed VCs to provide warm introductions and glowing recommendations to the next crop of investors.

Beyond executive assistants, Fielding identified other "red flags" for VCs, including the presence of COO and CFO roles at early-stage startups. These titles can be indicative of unnecessary operational overhead, particularly if they're held by a third co-founder who doesn't have a clear role. Fielding warned that such arrangements can be "very expensive" in terms of stock and salaries, and that founders should focus on developing their product and acquiring customers before establishing a complex organizational structure.

Salaries themselves are another area where early investors might keep quiet but are paying close attention. Fielding recounted a deal she ended because the founder was paying themselves $300,000, which she deemed excessive. According to Fielding, a reasonable salary at the pre-seed level is between $85,000 and $125,000. She emphasized that it's a matter of simple math: if a founder has raised $1 million pre-seed but pays themselves $200,000, they've already spent a fifth of the money. While Fielding acknowledged that founders shouldn't be expected to earn $100,000 forever, she cautioned that at the early stage, "you just don't have that cash to burn."

The debate sparked by Fielding's post serves as a timely reminder for founders to prioritize cash management and operational efficiency in the early stages of their startup. As the venture capital landscape continues to evolve, it's essential for entrepreneurs to be mindful of their spending habits and focus on building a solid foundation for their business. By doing so, they can increase their chances of securing subsequent funding rounds and achieving long-term success.

In conclusion, Fielding's social media post has sparked a necessary conversation about the importance of cash management and operational efficiency in early-stage startups. As the startup ecosystem continues to mature, it's crucial for founders to be aware of the expectations and scrutiny they'll face from investors. By adopting a frugal and focused approach to building their business, entrepreneurs can set themselves up for success and create a strong foundation for future growth.