AngelList makes startup compensation trends searchable with new Salaries dashboard
As if attracting (and affording) top talent weren’t one of the biggest challenges of building a startup, now developers everywhere can know that “average” developers earn $93,000 a year and receive 1.5 to 2 percent equity. (And as with people on dating sites who considers themselves average?) In Silicon Valley, the cash numbers climb higher, putting strain on even the best funded companies. If you don’t pay enough, you’ll lose them to the next sexy opportunity. Give up more equity to lessen burn rate, and you lose control of your company even faster.
You can thank AngelList and its brand new compensation dashboard, which it’s rolling out today, for taking the arbitrage out of startup salaries. AngelList has spent the last three years gathering more data on early stage companies and the entrepreneurs and investors that drive them than nearly any other platform (with the possible exception of Crunchbase). Following a year in which it launched several data-centric products, including Docs, Valuations, Jobs, Accelerator Applications, and Investing, it’s added a program to analyze the salaries and equity afforded employees across the startup ecosystem.
This data is derived from AngelList’s Jobs portal, which it launched last year to match employment opportunities with talent. Today there are 2,871 startups out of its 100,000 company profiles with active job listings – including Uber, AirBnB, Path, Quora, and Kickstarter – and nearly 7,400 vetted candidates seeking jobs. (Today 5,855 “top candidates” are openly looking, and another 1,537 are “secretly looking.”) Over the past week alone, the platform added 270 new vetted candidates and made more than 1,000 mutual matches between potential employees and employers.
Amid all this matchmaking, AngelList has gathered some compelling information. Each job posted by employers on the platform requires an explicit salary and an equity compensation offer. AngelList aggregated and analyzed the data within the new Salaries product, making it searchable according to role, location, candidate skill, and market. Only data from “quality job postings” is included in the calculations, meaning that outliers like a company seeking a PhD for $25,000 per year will be removed. Like each of the above mentioned features, AngelList Salaries is free to use and open to all members of its platform. (The investing product is available to Accredited Investors only.)
The results are revealing. The average salary for a developer across all job postings on the platform is $93,000, with a high of $105,000 and a low of $75,000. Equity compensation for those in the category ranges from 2 percent down to 0.5 percent, with no average provided. Debunking conventional wisdom, the highest salaries are not going to developers but to those in sales (average salaries of $99,000 and a high of $112,000). Marketers are commanding $92,000; designers average $88,000.
On the equity side, the order flips again, with marketers getting the largest ownership stakes of 2.6 percent on the high end, followed closely by sales at 2.5 percent, and designers falling in behind developers at a max of 1.75 percent. Perhaps this surprising pecking order is an indication that startups are beginning to focus on revenue, or at least demonstrable traction, amid the very real Series A crunch.
Dozens more comparisons are possible by drilling down into the data treasure trove to explore specific geographies and markets (e.g. consumer, enterprise, mobile, or healthcare), and by filtering according to specific skill sets like Ruby, Python, user experience (UX) design, and Photoshop.
Unsurprisingly, Silicon Valley is the most heavily represented startup ecosystem on the platform, with the most job listings and thus the most data. Not surprisingly, given the recent talent wars among large and small Bay Area tech companies alike, the market also has the largest percentage of six figure salaries of any region.
The idea for the Salary product came from AngelList designer Mischa Fierer who sought to help a founder friend price a job posting on the platform. As Fierer describes it, AngelList does not offer employees discretionary “20 percent time,” a la Google, but rather gives them the freedom to choose what they want to work on at all times. The leeway allowed him to create the Salary product quickly, he says, and launch it quietly late last week. The beta product is not yet listed on the AngelList home page or menu bar, and can only be reached by entering its URL directly into the browser.
As AngelList founder Naval Ravikant pointed out to me in an email, the platform, which is in beta, needs a final polish. For example, Fierer plans to collapse the various hyper-local regions of the Valley, such as San Francisco, Mountain View, Palo Alto, and several others, into a single representative category. It would be interesting to have the option to view the market both as a whole and on a granular neighborhood basis, but creating single consolidated category would absolutely be wise. The platform is limited to US job listings, because currency conversions have yet to be incorporated – London, for example, has 93 current job listings that are not being considered. I expect both will be addressed shortly.
Another thing I’d like to see added would be compensation averages across each of the granular categories. The platform currently delivers average salary and equity figures only when choosing the “compare all” view, instead offering a bar graph distribution of job postings in each $10,000 salary range when drilling further down into the various sub-categories – leaving viewers to calculate averages manually.
It’s a shame, given the recent funding cycle, that this wasn’t around since 2008; ostensibly it would have captured a dramatic increase in developer salaries, valuations, etc. And there are many more interesting analyses that this could enable, as well, such as correlating startup salaries to real estate prices and vacancy rates in startup hubs.
Not everyone in the the startup arena will be thrilled to see this data made available. Founders have long relied on information scarcity and opacity to shield their compensation offers. It was only with a written, and thus explicit offer from a competitor that employees had real negotiating leverage. AngelList Salaries changes that dynamic, and it’s likely to grow more comprehensive and more powerful over time. But this is the new normal; information wants to be free.
AngelList is not the first company to come up with the idea of a salary database. Glassdoor and others have been doing it for years. But these platforms typically emphasize large companies like consulting firms, investment banks, and CPG manufacturers for which employee data is readily available. AngelList has, it seems, cornered the market on comprehensive and broad startup compensation data.
In this case, not even Crunchbase can compete.