Tag: compensation

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How much to pay your engineer? This startup will tell you

Figuring out what to pay employees is a universal problem. Startups, in particular, struggle with compensation as they are often competing with other startups for talent.

For Roger Lee, the issue came up repeatedly when he co-founded 401(k) provider Human Interest, which achieved unicorn status in August of 2021 and today has nearly 700 employees. (Lee is no longer involved in that company’s day-to-day operations, although he remains on its board.)

“Figuring out employee compensation was one of our top sources of frustration,” Lee told TechCrunch. “We were using what felt like 1,000 spreadsheets to track and decide salaries, equity, raises, pay ranges and offers.”

“It was impossible to get a holistic view of employee compensation to ensure that we were paying people fairly and competitively.”

So in October of 2021, he teamed up with his former Harvard roommate Teddy Sherrill to start Comprehensive in an effort to tackle the problem. The company is emerging from stealth today, announcing a $6 million seed round raised earlier this year led by Inspired Capital and including participation from Floodgate, SV Angel as well as founders and C-level executives of Rippling, Wealthfront, Pilot.com, Thumbtack, Public.com and others.

Comprehensive’s target customers are startups, a world Lee is familiar with, having started two of his own, as well as launching Layoffs.FYI — a layoff tracker — at the onset of the COVID-19 pandemic. Early customers include Mercury, LaunchDarkly, Clearbit, Titan and Clever.

A number of startups have emerged in this space in recent years. In August, Complete announced a $4 million raise. As TC’s Anita Ramaswamy wrote at that time, “Series A startup OpenComp has a similar product geared toward high-growth companies looking to improve their recruitment and retention, while…YC-backed Compound seeks to help tech employees understand their own compensation.”

Lee hopes to make Comprehensive stand out from its competitors by making its offering well, as comprehensive as possible. For example, it wants to help startups with all aspects of compensation matters within their organization — going beyond salaries to also advise on compensation reviews, employee communication and pay analytics.

“Employee compensation is now more complex and higher-stakes than ever, given the recent trends of remote work and inflation and the focus on DE& I,” said Lee. 

He argues that the issue goes beyond human resources with multiple teams involved in the process and data scattered across multiple systems. Lee is hoping with Comprehensive, companies will “have the visibility to see the compensation-related information in a single place.”

“When comp data lives in siloed systems, a company can’t really make informed decisions on compensation,” Lee added. “We’re aiming to unify all that data.”

Image Credits: Comprehensive

Comprehensive is not just about employee recruitment, he emphasizes. It’s also about employee retention. Lee estimates that employee compensation typically represents 70-80% of startups’ overall costs — representing its biggest expense “by far.”

“Now more than ever, startups want to know that the money they’re spending is being used to reward and retain their high performers and not being wasted,” Lee said.

Comprehensive operates a SaaS model where it charges companies a subscription based on their size. The 10-person startup plans to use its capital toward growth and continued hiring.

Alexa von Tobel, founder and managing partner of Inspired Capital, believes that as the HR tech stack “continues to shift to the cloud, compensation is a thorny and complex tech challenge that is ripe for innovation.” 

“Compensation has fundamentally evolved in the past year, and Comprehensive was born to meet this specific moment: more remote companies with disparate compensation expectations, salary inflation, increased needs for compensation disclosure and assessments for pay gaps, and more,” von Tobel wrote via email.

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How much to pay your engineer? This startup will tell you by Mary Ann Azevedo originally published on TechCrunch

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4 principles private capital firms should follow to win the talent race

Richard Change Contributor
Richard Change is the co-founder and managing partner of PFA Solutions.

Successful private capital firms long ago ditched their spreadsheets and moved to digital tools for accounting and other middle-office tasks as part of a larger trend toward improving efficiencies, controls and operational transparency. But there’s one function desperately in need of the same modernization: compensation.

Private markets are eclipsing public markets, and the trend shows no indication of letting up. Alternative assets under management are primed to exceed $17 trillion by 2025 — a compound annual growth rate of 9.8% that far surpasses both global GDP and inflation, according to research firm Preqin.

With that growth has come increasing operational maturity and a focus on talent as a top strategic priority in firms of all sizes.

It’s not hard to see why. In alternative investments, success is driven far more by human intelligence, judgment, relationships and reputation than by algorithms. When your second-most important asset walks out the door (physical or virtual) every day, attracting and keeping that talent in-house is paramount.

Between salary, bonus, vesting, carried interest and management-company ownership, it can be nearly impossible for employees to know where they stand financially.

It’s no myth that many investment bankers at the analyst/associate level dream of going buy-side — the romantic fantasy of acceding to “master of the universe” status has long been supplanted by a less romantic, data-driven mindset drawn to the meritocratic culture (and highly accretive compensation model) of private capital.

But when it comes to attracting and holding on to the best and brightest, there’s no such thing as a slam dunk. While a talented young associate may make the lateral move to your firm with an eye on total compensation growth over time, there is zero guarantee that they will stay put until they reach the magical threshold of earning carried interest — typically, not until years four, five or six. From a retention point of view, those early years are the most vulnerable (a factor further intensified by today’s Great Resignation trend).

There’s a way to win the loyalty of the people who hold your future success in their hands. Offer them compensation transparency — 360-degree visibility into the issues that matter most to them as they chart their career — into everything from salaries, benefits, bonuses, carried-interest allocations, co-investments, past distributions and forecasting (or dollars-at-work).

Hidden costs and hidden risks

While private capital’s compensation system rewards longevity, it carries a hidden cost: complexity and opacity on top of the “predictable unpredictability” that is a hallmark of the industry.

It’s hard for an employee to know what they have, what they will have, what they might have or to understand the rights and obligations of both joiners and leavers. And in a clawback situation, where employees could be forced to pay back previously received carried interest, additional complexities and tax consequences can ensue for all.

The SEC has taken note. Commissioner Allison Herren Lee recently described employees with equity as investors “with much at stake,” who are nonetheless unable to determine the “full financial consequences of leaving their jobs” — essentially an “investment decision that must be made in the dark.”

This development is only one element of a larger story: the commission’s growing oversight of private funds, from proposed changes to its Form PF disclosure-of-material-events rules to a 341-page document of proposals focused on increased transparency at private funds.

Four steps to a talent advantage

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Complete helps startups think through the ‘why’ and ‘how’ of employee pay

For early-stage startups looking to hire new talent, it’s not enough to make one-off decisions about pay as each new employee comes on board. Constructing a coherent philosophy around compensation is crucial for a company to stay consistent in the long term and provide transparency to employees — essentially, coming up with the “why” and “how” behind salary decisions.

In today’s job market, where layoffs and hiring freezes abound, getting compensation strategy right is even more important, CEO Rani Mavram of HR tech startup Complete told TechCrunch in an interview.

“Even if companies are hiring fewer roles, the importance of getting that higher right becomes increasingly more important,” Mavram said.

Complete aims to help companies, particularly early-stage startups, conceptualize and implement a firm-wide compensation strategy, reflective of cash, equity, bonuses and benefits.

Screenshots of Complete's compensation strategy platform

Screenshots of Complete’s compensation strategy platform Image Credits: Complete

“We work with them on [questions like], are you going to do negotiable offers or non-negotiable offers? Are you going to give your candidates multiple options as you think about raises and bonuses? Is that something tied to performance, or are you going to do that by default for everybody? So within these broader segments of compensation, we distill them down and then help them connect to what is right for their company,” Mavram explained.

Complete provides an interactive offer letter product for candidates applying to roles at its client companies and recently began offering a similar product to help employees understand what comprises their total compensation, Mavram said.

Mavram cofounded Complete with CTO Zack Field last year and took the company through Y Combinator’s Winter 2022 cohort. Mavram used to work on the product team at Google, while Field’s background is in engineering at various late-stage startups, including Uber and Opendoor, the pair told TechCrunch.

Mavram witnessed her team at Google grow rapidly and navigate the challenges of getting the “compensation narrative” right, she said.

“Even after I left Google, I was trying to think more about if the Googles of the world are experiencing this pain, what does this feel like to a early stage startup was just starting to have this conversation for the first time?” Mavram mused. 

Field, meanwhile, saw his employers go from private to public and ended up becoming the go-to source among his colleagues for information about how to understand their equity compensation because he had done so much research on the topic, he said.

WTF is a 409A?

“For some of our early stage clients, they don’t even have levels set up — like they don’t even have a software engineer one versus a software engineer two. And so that’s one level of education that when they have developed that philosophy they can share it back with employees. I would say that the fidelity of information that we’re most focused on is actually how your compensation is constructed, or what we call total rewards,” Mavram said.

The company just announced it has raised $4 million in seed funding led by Accel. Other participants in the raise include Y Combinator as well as angel investors from Calm, Opendoor and Stripe, according to Complete.

It is far from the only startup working on demystifying compensation decisions. Series A startup OpenComp has a similar product geared toward high-growth companies looking to improve their recruitment and retention, while similarly YC-backed Compound seeks to help tech employees understand their own compensation.

“Compensation is one of the ways that individuals develop trust with their employer,” Mavram said. Companies that are proactive about compensation decisions and that prioritize transparency can harness their compensation strategy into a competitive advantage, she added.

Complete hopes to further expand its support for the administrative tasks involved with making a new hire, Mavram said.

Oftentimes with young startups, founders themselves are the ones thinking through decisions about how much equity to offer a new hire, so Complete’s product aims to help them understand how different paths would impact their business and capitalization. Complete currently focuses on helping companies create a rationale behind their compensation decisions, though companies ultimately can still choose what parts of that information they want to share with their employees.

Mavram hopes to expand Complete’s five-person team by bringing on more engineering and design hires to help the company keep up with new customer demand, she said. Complete works with large customers including Vercel and DataStax as well as earlier-stage companies such as Convex and TrueNorth. Although Mavram declined to share how many customers Complete works with in total, a spokesperson for the company said it has provided analysis for several thousand salaries.

“Long term, I hope that every company has a compensation philosophy, or [knows] what it means to comp,” Mavram said. “I would hope that success for us looks like, every company we work with, or even more broadly, in the startup space, has one of those on their website, whether it be on their careers page or next to their privacy policy, and that becomes the status quo of what it means to have thought this through.”

As companies fight to retain talent, employee-benefits startups might escape cost cuts

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How to approach building your first employee benefits package

Anitra St. Hilaire Contributor
Anitra St. Hilaire is the vice president of People at ThreeFlow, a benefits placement system.

I’ve been the first human resources leader at two successful startups. In both instances, I’ve built the human resources function and people teams from the ground up.

Doing this from scratch means you have to consider everything, from compliance to compensation. Often, processes and procedures just fell into place before I joined, so it was my job to evaluate whether they made sense.

One of the most complex and interesting topics I tackle is employee benefits packages. It’s a subject that comes up often at startups that want to ensure they have a competitive edge when it comes to hiring and retaining talent.

However, it’s also been known to get out of hand, and with startups tightening their budgets, I believe we’ll start to see benefits changing drastically in the coming months.

Founders need to ask themselves what really matters to their business, and which benefits best align with their cultural values.

Virtually every company will have its own take on what should be offered to employees, so founders inevitably struggle with what makes the cut (and what doesn’t). There’s no “one size fits all” benefits package, and nor should there be, as each company has its own objectives and goals.

Here are four aspects for founders should consider when building benefits packages:

Focus on what matters most to your people

It’s imperative that startups should not try to match what other technology companies are offering. It’ll be impossible to offer every flashy new perk that you come across, or provide extravagant packages like Google or Facebook.

For example, Netflix offers unlimited parental leave, which is incredible, but for an early startup, offering this would be daunting and difficult.

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A niche facet of startup employee pay, explained

Hello and welcome back to Equity, a podcast about the business of startups, where we unpack the numbers and nuance behind the headlines.

This is our Wednesday show, where we niche down to a single topic, think about a question and unpack the rest. This week, Natasha and Anita asked:

When is a company taking internal valuation cut a good thing?

Normally, when we hear about valuations going down, that’s a red flag that things aren’t going well at a given company or in the market at large. We wrote about Stripe’s 28% internal valuation cut earlier this month and as we listened to different reactions to the news, we noticed some people had an unexpected take — that this downward revision was actually a positive for the company’s employees.

That’s because the cut came from an internal 409A valuation appraisal, which is totally different from the investor-led valuations we normally hear reported on in the news. So we brought on two experts — Phil Haslett of EquityZen and Sumukh Sridhara of AngelList — to help us unpack what this valuation cut actually means for startup employees and what else they need to know about their equity compensation heading into a market downturn. For more information, you can also check out our TechCrunch+ piece about the matter, “Stripe’s new and lower internal valuation, explained.”

Let us know if you want more Chain Reaction x Equity crossover episodes by tweeting at either of us or just sharing this episode with a friend. Numbers speak for themselves :)

Equity drops every Monday at 7 a.m. PDT and Wednesday and Friday at 6 a.m. PDT, so subscribe to us on Apple Podcasts, Overcast, Spotify and all the casts.

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Here’s how to protect your equity if you get laid off

Adam Keesling Contributor
Adam Keesling works for Compound, a company that specializes in helping tech founders and employees manage their financial lives, starting with their illiquid company equity.

As of late June, over 22,000 tech employees had been laid off this year, a number expected to increase throughout the year. If you’ve found yourself in this position, you should understand exactly what will happen to your equity, because it’s likely impacted by your termination, and inaction could cost you a life-changing sum of equity.

By the end of this guide, you’ll understand:

  • The basics of equity compensation.
  • How leaving your company impacts the status of your equity.
  • Strategies to save your equity from expiring.

Equity 101

Tech employees are well aware that their stock options are a key element of their compensation package, it vests over time, and that they purchase this equity at its original price (the “strike price”) — if you need a refresher you can browse resources here.

While equity is an excellent opportunity to build wealth, it’s a challenging decision if and when to purchase your shares. When you consider changing jobs, you can control the timeline so you purchase equity accordingly. When you’re terminated from your company, you lose this flexibility and control.

Investing a small amount of time to figure out what you want to do can potentially lead to a life-changing sum of money.

First, you should know that any unvested shares are gone. When terminated, the only question is what you will do with your vested and unexercised shares. Stock options have a “post-termination exercise window,” which refers to the period of time between when you exit the company and when your unexercised, vested stock options expire. (The post-termination exercise window applies to both voluntary and involuntary terminations.)

When your stock options expire, they are returned to the company. When this happens, you (the former employee) retain none of the value. So be careful: If you leave your company and you haven’t exercised your options yet, they now have an expiration date. When this date arrives, you lose them.

While some companies have extended the post-termination exercise window, it’s typically 90 days. This means you’ll have approximately three months from your termination date to make a challenging decision: Do you exercise your stock options or allow them to expire? And if you do exercise those options, how will you pay for both the options and their tax consequences?

It’s never a calm time after you lose your job, especially during a recession. It can feel especially chaotic to contemplate exercising equity at a time when you’re also worrying about your personal finances.

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Liquifi is building the “Carta of web3” for companies issuing tokens on the blockchain

Web3 startups’ cap tables can look quite different from traditional ones. Rather than issuing equity as a form of incentive alignment for employees, as a typical startup would, crypto companies often opt to issue tokens that represent ownership. Tokens are an entirely separate asset class with their own complexities, rules, and regulations.

Cap table management software company Carta commanded a $7.4 billion valuation last August for its suite of tools that help companies navigate equity issuance, compensation, and related challenges. While Carta has been around for nearly a decade, there’s a new upstart looking to replicate its model for the nascent cohort of web3 startups, through a focus on token management — LiquiFi.

Because of the relative newness of token-based compensation as a widespread practice, many web3 companies manage their cap tables manually, using custom, in-house systems and spreadsheets, Robin Ji, CEO and co-founder of LiquiFi told TechCrunch.

LiquiFi, part of Y Combinator’s winter 2022 batch, helps startups automate their token vesting, manage their token cap table, and issue token grants in compliance with regulations, Ji said. Ji and LiquiFi co-founder and CTO Oliver Tang recognized the challenges associated with token-based compensation after working at other crypto companies, Eco and Set Labs respectively.

Since its founding last year, the company has gone live on Ethereum and Polygon, and is “quickly expanding to other chains,” Ji said. While he didn’t share the number of customers the company is working with today, he said LiquiFi’s customer list includes both large DeFi protocols and smaller startups that are just launching a token for the first time.

“We definitely have a long list of customers that are about to launch a token, but haven’t onboarded yet,” Ji added.

Token management differs from equity management because of some fundamental differences between the two asset classes, Ji said. Tokens are more dynamic than equity — you can vote with them, stake them, lend them out, and provide liquidity, he continued.

Another key difference is that when traditional equity is transferred, legal papers and agreements serve the purpose of tracking ownership. In contrast, when tokens are transferred, assets move on a blockchain and a transfer of custody takes place, Ji explained. The technology needed to transfer tokens can be complex, sometimes requiring companies to write custom code.

“In a traditional [platform like] Carta, you basically click buttons, work with lawyers to draft agreements, and you send it off for them to sign, and that’s basically the transfer of assets,” Ji said. “But with tokens, there’s that, plus the actual asset that’s being transferred, so the technology piece is one thing … The second piece with tokens is general know-how of compliance and processes.”

LiquiFi helps companies with both aspects. Its product today is geared toward companies that already have their own tokens or are on the verge of launching them. Eventually, though, Ji hopes to add features that can serve customers well before they have launched a token by helping them figure out allocation and distribution strategies that can deliver optimal returns for all the parties involved in an issuance process.

The core product includes a dashboard where customers can see their smart contracts and tokens outstanding as well as tax compliance features. LiquiFi is also working on a product that would allow individuals with locked or vesting tokens to earn additional yield on those tokens while they’re being held — an entirely new capability that no other company had developed previously, Ji said.

The startup announced today that it has raised $5 million in seed funding led by Dragonfly Capital Partners. Nascent, Alliance DAO, 6th Man Ventures, Robot Ventures, Y Combinator and Orange DAO also participated in the round, as well as prominent angel investors in the crypto space including Balaji Srinivasan, Katie Haun, Packy McCormick, Anthony “Pomp” Pompliano, and Anthony Sassano.

LiquiFi plans to use the funding to invest in product development, design, marketing, and sales, Ji said. The company also hopes to hire in-house counsel and build out a recruiting team, he added. In terms of adding compatibility with other blockchains, he said the company plans to start with EVM-compatible ones, namely Solana and Terra, in the near term.

The company’s fundraising process moved fast, Ji said. He hopes the business will be able to continue scaling rapidly.

“The biggest risk for us is just making sure that we are moving as fast as the [crypto] market is moving, because if we don’t, then we’re going to be left behind,” he said.

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Assemble scores $5M seed to bring order and equity to compensation

Every company has to decide what to pay their employees and track that compensation in some way, often in spreadsheets and across disparate payroll, finance and HR systems. Companies also need to ensure that they are paying people with comparable experience a similar amount for the same job.

Assemble, an early-stage startup, wants to bring organization to this process, and today it announced a $5 million seed investment from Susa Ventures, Goldcrest Capital and several industry angels.

Assemble co-founder Enrique Esclusa said that the startup has created a system of engagement for compensation decisions.

“This is a system that assembles all that compensation and workforce data in one central location that usually lives in disparate systems, and then makes it not only accessible but actionable and easy to understand for various stakeholders across the company,” he explained.

Esclusa and his co-founder, Lisa Wallace, worked together at another company where Wallace was in charge of hiring and Esclusa managed finance and business operations. It was there that they learned firsthand just how hard it was to track this type of information.

“What we realized was that virtually everything lived in spreadsheets, which is a really painful and time-consuming way to put all this data and frameworks together, share the right information with people who are making decisions across the company, and make decisions that not only were competitive enough so that you could hire folks and attract them and retain employees, but also were financially responsible and fair and equitable,” he said.

So in 2020, the two founders got together and decided to do something about it, and built a product to address the issues they experienced.

The need for true equity in equity compensation

Wallace said that companies typically don’t consider equity in a direct way as they build an organization, then go back and try to fix it, a process that requires consultants to pull the information from various systems. Assemble is designed to build equity into the compensation system from the start.

“It’s not just about running a pay equity analysis in one place, or providing one-off visibility to managers in another place. It’s about truly having a layer of engagement across your organization that works from multiple stakeholders that are touching compensation because there are so many different stakeholders and so many different objectives, and it’s really easy to go off the rails,” she said.

Assemble pay equity report.

Image Credits: Assemble

Assemble. currently has 10 employees, and with a diverse founding team and a DE&I mission around pay equity, they are working to build a diverse and inclusive company.

“We’ve made a pretty concerted effort for each rec that we’ve opened to interview and evaluate diverse candidates. … It’s something that I’m really focused on, and Enrique and I spend about a third of our time recruiting,” she said, adding that while they only have the 10 employees so far, their diversity numbers are fairly good on a number of metrics.

“So we’re 40% Hispanic as a company and 60% of us are immigrants or the children of immigrants,” she said. While just two of the current 10 employees are women, Wallace said that’s something she’s working to address in future hires. She said that the company is also working on diversity on the funding side by bringing in a number of historically underrepresented angel investors into the cap table.

Since compensation doesn’t live on its own inside an organization, Assemble works in conjunction with HR and payroll software tools like WorkDay, Gusto, ADP and Bamboo HR.

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As human capital grows scarce, flexible compensation can help attract and retain talent

Boyd Davis Contributor
Boyd Davis is the CEO and co-founder of Compright, a cloud-based compensation planning tool. Previously, Boyd helped organizations deploy solutions that leveraged data and AI.

The Great Resignation is among the most significant events in recent U.S. history. We are seeing a post-COVID-19 generation refusing to work under the same conditions as they did before. The U.S. is facing the most prominent labor shortage of the decade, and positions that require high-demand skills are harder than ever to fill.

Midsized companies are finding it particularly hard to retain qualified personnel. Confronted by notable resource constraints, smaller budgets and workers’ demand for flexible solutions, the problems for SMBs are as great or even more significant than for larger organizations.

One way to make your company attractive is by developing attractive compensation strategies and increasing pay transparency and equity. Employees don’t always leave or stay because of their pay, but an opaque model for allocating compensation exacerbates feelings of disconnection and lowers engagement.

Let’s dive into how startups can benefit from compensation analysis, and how they can utilize available data to develop a comprehensive compensation strategy.

Understanding the complexity of compensation

Pay equity is one of the most pressing social issues today, and any discrepancies can have adverse spillover effects on reputation and company relationships.

The amount that lands in an employees’ bank account is just one fragment of today’s compensation packages. Compensation can consist of a base salary, annual cash bonuses and long-term incentives.

When stirring a compensation mix together, there are different trade-offs to consider:

  • Fixed versus variable compensation: Base salary compared with bonuses.
  • Long-term incentives versus short-term incentives: Short-term incentives can be in the form of annual bonus structures. Long-term incentives are usually stock or other forms of compensation that vest over the years.
  • Cash versus equity: Equity can include stock options, restricted stock and performance shares.
  • Group incentives versus individual incentives: You could implement a percentage-based salary increase for all positions or give bonuses to select employees.

It isn’t ideal to have a uniform policy for all positions and departments. Managers should explain their reward decisions on an individual level, and compensation decisions should reflect the skills and contributions of every employee. In addition, companies are bound to have varying budgets (e.g., higher revenue during the holiday seasons) and philosophies on allocating them.

Many make the mistake of sticking to an approach that doesn’t pan out from a strategic standpoint or doesn’t motivate the team enough. Instead, managers should gather data, work through various analyses and scenarios and design a compensation strategy tailored to the company. This is where compensation management software comes into play.

The devil is in the data

Data will help you understand where the talent market is headed and where your company stands.

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Job offer management platform Compa emerges from stealth with $3.9M

If you haven’t noticed yet, the hiring market is a hot one — and getting more complicated as enterprise talent acquisition leaders face technology gaps while assessing candidates. This leads to difficulty in determining compensation.

Enter Compa. The offer management platform provides “deal desk” software for recruiters to more easily manage their compensation strategies to create and communicate offers that are easy to understand and are unbiased.

Charlie Franklin, co-founder and CEO of Compa, told TechCrunch it was frustrating to lose a candidate at the compensation stage, so the company created its software to reduce the challenge of relying on crowdsourcing data or surveys to compare pay.

“Recruiters often lack the data and tools to figure out how much to pay people and communicate that effectively,” Franklin told TechCrunch. “We see talent acquisitions teams like a sales team. If you think of it from that perspective, they need to close a candidate, but to ask the recruiter to operate off of a spreadsheet slows that process down.”

Compa co-founders, from left, Charlie Franklin, Joe Malandruccolo and Taylor Cone. Image Credits: Compa

With Compa, recruiters can input pay expectations and compare recent offers and collaborate with other team members and hiring managers to reach pay consensus quicker. The software automates all of the market intelligence in real time and provides insights about compensation across similar industries and organizations.

The company, based in both California and Massachusetts, emerged from stealth Thursday with $3.9 million in seed funding led by Base10 Partners. Participation in the round also came from Crosscut Ventures and Acadian Ventures, as well as a group of strategic angel investors including 2.12 Angels, Oyster HR CEO Tony Jamous and Scout RFP co-founders Stan Garber and Alex Yakubovich.

Jamison Hill, partner at Base10 Partners, said via email his firm was doing research in the ESG “megatrend,” particularly looking for startups focused on compensation management, when it came across Compa.

He was attracted to the founders’ “clarity and conviction” on the company’s vision, their understanding of the pay gap in the market, how Compa’s solution would “create a new wave of smarter, more-data driven recruiting teams” and how it was enabling employers to use compensation and a positive offer management approach to differentiate itself from competitors.

“They deeply understand the nuances that come with enterprise-level HR teams and bring that expertise to every aspect of Compa’s product offering, which is why we believe Compa can emerge as a leader in this trend and chose to partner with this very special team,” Hill added.

Franklin, who previously led human resources M&A at Workday, founded Compa last year with  Joe Malandruccolo, who was on the engineering side at Facebook and Oculus, and Taylor Cone, who has done innovation consulting for organizations like Stanford University.

The company was bootstrapped prior to going after the seed round and will use the capital to expand the team and create additional products that fit into its mission of “making compensation fair and competitive for everyone,” Franklin said.

Going forward, he adds that job offers and compensation need to catch up to how quickly the world is changing. As more people work remotely and companies want to attract a diverse workforce, compensation will be an important factor.

“This is a long-term trend we are seeing in HR — compensation becoming more transparent — not just a spreadsheet shared internally, but a transition from secretive to open and accountable, Franklin said. “Technology is catching up to that, and we have the ability to produce outcomes that drive differences in pay.”

Companies should utilize real-time compensation data to ensure equal pay