Pave raises millions to bring transparency to startup compensation


Image Credits: Malte Mueller (opens in a new window) / Getty Images

Compensation within private venture-backed startups can be a confusing minefield that if unsuccessfully navigated can lead to inconsistent salaries and the kind of ambiguity that breeds an unhappy workforce.

Pave, a San Francisco-based startup that recently graduated from YC Combinator is aiming to end the pay and equity gap with a software tool it developed to make it easier to track, measure, and communicate how and what they pay their employees.

The question is whether Silicon Valley, which has a history of pay inequity and gender disparities, is ready for that kind of transparency?

Investors certainly think so. Andreessen Horowitz has poured millions into Pave’s $16 million Series A round, at a post-money valuation of $75 million, confirming our reports from August. The round also includes the a16z Cultural Leadership Fund, Bessemer Venture Partners, Bezos Expeditions (a personal investment company of Jeff Bezos), Dash Fund, and Y Combinator.

Kristina Shen, a GP at A16z, will be joining the board. Marc Andreessen will take a board observer seat.

A rebrand and re-focus

Pave, known until now as Trove, is trying to build an online market of data and real-time tools that bring more fairness in compensation to the startup world. The tools allow a company to track, measure and ultimately communicate compensation on an employee-by-employee basis. It does so by integrating HR tools such as Workday, Carta and Greenhouse into one unified service that CEO Matt Schulman says it only takes the customer 5 minutes to set up with Pave.

The service can then help companies figure out how to manage their employees’ pay, from promotion cycles and compensation adjustments to how to reward a bonus and how much equity to grant a new employee.

Employees, meanwhile, can see data on their entire compensation package as well as predictive analytics on how they can grow their stake in the company. The tool is called Total Rewards, and its closest competitor, Welcome (which raised $6 million this week) launched a tool with the same name, and same goal.

Pave’s Total Rewards Portal for employees.

Schulman says that all startups struggle with figuring out stock options, equity, benchmarking data and promotion cycles because it’s an offline (and cumbersome) process. Clear communication about these details, though, helps with both hiring and retention.

Pave’s biggest challenge, is convincing its startup customers to share data on their payment structures. While data is anonymized so employees can’t see their colleagues salaries, it does require buy-in from a company to track potential inequity in the first place.

“I imagine there will be some late adopters that are not fully aligned with that vision at first,” Schulman admits. “How can we really change how compensation works as something that has been stagnant for decades upon decades? That’s not an easy challenge.” Right now, Pave is working with companies on a case by case basis to see how much they want to communicate with employees. Long-term, Schulman wants there to be a standard.

Is the industry ready to be benchmarked?

And the founder is optimistic that he can get there. Schulman pointed to Carta, a cap management tool, as an example of widespread adoption.

“There were companies that at first resisted Carta, and they were not comfortable putting all of their records into one centralized database,” he said. “Now, it’s ubiquitous. Every company uses Carta among venture-backed companies.”

But,even Carta has struggled with what it wants other companies to do: pay their employees fairly. Carta is currently facing a lawsuit from its former vice president of marketing, Emily Kramer, for gender discrimination. In the lawsuit, Kramer notes that she was paid $50,000 less relative to her peers, and her equity grant was one-third the amount of shares than her male counterparts. The company also laid off 16% of its employees, citing a lack of new customers.

If Carta, valued at $3 billion, has difficulties, then an early-stage startup such as Pave will also come up against big hurdles around transparency. The startup is hoping that its new industry-wide benchmark project will help kickstart the conversation and nudge companies in the right direction.

Launching today, Pave has teamed up with the portfolio companies of a16z, Bessemer Venture Partners, NEA, Redpoint Ventures and YC to gather compensation data. The data, which is opt-in, will allow Pave to release a compensation benchmark survey to show how companies pay their employees. The survey will be public but will aggregate all company responses, so there is no way to see which company is doing better than others.

Other platforms have tried to do measure pay across roles, such as Glassdoor and Angellist. Schulman says that “companies don’t trust that data” because it’s crowdsourced and therefore has a survey bias.

The tool would help companies go from doing a D&I analysis once a year to being able to do it consistently, “so they don’t drift away from a fair and equitable state,” he said.

While Pave tries to convince other startups to share intimate information, as a company it is still figuring out how to do the same. The company declined to share the diversity break-down of its team, which grew from five to 13 employees in just months and has a 30-person target by end of year. Based on LinkedIn, Pave’s team skews white and male.

A push from the rise of remote work might make transparency happen sooner than later. The rise of distributed workforces has forced companies to start asking questions around compensation, Schulman said.

“How do you pay your San Francisco engineer who wants to move to Wyoming?” Schulman said. “That’s the question that’s on everyone’s mind.” The shift is making compensation become a mainstream conversation, the company has found interest in its service from companies including Allbirds, Checkr, Tide, and Instabase. Schulman says early adopters have been bullish about transparency.

Once Pave can figure out how to support venture-backed startups, it’s looking outwards to other geographies and types of businesses.

“There’s 3 billion humans in the world that work in a part of the labor market,” he said. “And right now it’s a black box in how they’re compensated.”

More TechCrunch

Expedia says Rathi Murthy and Sreenivas Rachamadugu, respectively its CTO and senior vice president of core services product & engineering, are no longer employed at the travel booking company. In…

Expedia says two execs dismissed after ‘violation of company policy’

When Jeffrey Wang posted to X asking if anyone wanted to go in on an order of fancy-but-affordable office nap pods, he didn’t expect the post to go viral.

With AI startups booming, nap pods and Silicon Valley hustle culture are back

A new crop of early-stage startups — along with some recent VC investments — illustrates a niche emerging in the autonomous vehicle technology sector. Unlike the companies bringing robotaxis to…

VCs and the military are fueling self-driving startups that don’t need roads

When the founders of Sagetap, Sahil Khanna and Kevin Hughes, started working at early-stage enterprise software startups, they were surprised to find that the companies they worked at were trying…

Deal Dive: Sagetap looks to bring enterprise software sales into the 21st century

Keeping up with an industry as fast-moving as AI is a tall order. So until an AI can do it for you, here’s a handy roundup of recent stories in the world…

This Week in AI: OpenAI moves away from safety

After Apple loosened its App Store guidelines to permit game emulators, the retro game emulator Delta — an app 10 years in the making — hit the top of the…

Adobe comes after indie game emulator Delta for copying its logo

Meta is once again taking on its competitors by developing a feature that borrows concepts from others — in this case, BeReal and Snapchat. The company is developing a feature…

Meta’s latest experiment borrows from BeReal’s and Snapchat’s core ideas

Welcome to Startups Weekly! We’ve been drowning in AI news this week, with Google’s I/O setting the pace. And Elon Musk rages against the machine.

Startups Weekly: It’s the dawning of the age of AI — plus,  Musk is raging against the machine

IndieBio’s Bay Area incubator is about to debut its 15th cohort of biotech startups. We took special note of a few, which were making some major, bordering on ludicrous, claims…

IndieBio’s SF incubator lineup is making some wild biotech promises

YouTube TV has announced that its multiview feature for watching four streams at once is now available on Android phones and tablets. The Android launch comes two months after YouTube…

YouTube TV’s ‘multiview’ feature is now available on Android phones and tablets

Featured Article

Two Santa Cruz students uncover security bug that could let millions do their laundry for free

CSC ServiceWorks provides laundry machines to thousands of residential homes and universities, but the company ignored requests to fix a security bug.

1 day ago
Two Santa Cruz students uncover security bug that could let millions do their laundry for free

OpenAI’s Superalignment team, responsible for developing ways to govern and steer “superintelligent” AI systems, was promised 20% of the company’s compute resources, according to a person from that team. But…

OpenAI created a team to control ‘superintelligent’ AI — then let it wither, source says

TechCrunch Disrupt 2024 is just around the corner, and the buzz is palpable. But what if we told you there’s a chance for you to not just attend, but also…

Harness the TechCrunch Effect: Host a Side Event at Disrupt 2024

Decks are all about telling a compelling story and Goodcarbon does a good job on that front. But there’s important information missing too.

Pitch Deck Teardown: Goodcarbon’s $5.5M seed deck

Slack is making it difficult for its customers if they want the company to stop using its data for model training.

Slack under attack over sneaky AI training policy

A Texas-based company that provides health insurance and benefit plans disclosed a data breach affecting almost 2.5 million people, some of whom had their Social Security number stolen. WebTPA said…

Healthcare company WebTPA discloses breach affecting 2.5 million people

Featured Article

Microsoft dodges UK antitrust scrutiny over its Mistral AI stake

Microsoft won’t be facing antitrust scrutiny in the U.K. over its recent investment into French AI startup Mistral AI.

1 day ago
Microsoft dodges UK antitrust scrutiny over its Mistral AI stake

Ember has partnered with HSBC in the U.K. so that the bank’s business customers can access Ember’s services from their online accounts.

Embedded finance is still trendy as accounting automation startup Ember partners with HSBC UK

Kudos uses AI to figure out consumer spending habits so it can then provide more personalized financial advice, like maximizing rewards and utilizing credit effectively.

Kudos lands $10M for an AI smart wallet that picks the best credit card for purchases

The EU’s warning comes after Microsoft failed to respond to a legally binding request for information that focused on its generative AI tools.

EU warns Microsoft it could be fined billions over missing GenAI risk info

The prospects for troubled banking-as-a-service startup Synapse have gone from bad to worse this week after a United States Trustee filed an emergency motion on Wednesday.  The trustee is asking…

A US Trustee wants troubled fintech Synapse to be liquidated via Chapter 7 bankruptcy, cites ‘gross mismanagement’

U.K.-based Seraphim Space is spinning up its 13th accelerator program, with nine participating companies working on a range of tech from propulsion to in-space manufacturing and space situational awareness. The…

Seraphim’s latest space accelerator welcomes nine companies

OpenAI has reached a deal with Reddit to use the social news site’s data for training AI models. In a blog post on OpenAI’s press relations site, the company said…

OpenAI inks deal to train AI on Reddit data

X users will now be able to discover posts from new Communities that are trending directly from an Explore tab within the section.

X pushes more users to Communities

For Mark Zuckerberg’s 40th birthday, his wife got him a photoshoot. Zuckerberg gives the camera a sly smile as he sits amid a carefully crafted re-creation of his childhood bedroom.…

Mark Zuckerberg’s makeover: Midlife crisis or carefully crafted rebrand?

Strava announced a slew of features, including AI to weed out leaderboard cheats, a new ‘family’ subscription plan, dark mode and more.

Strava taps AI to weed out leaderboard cheats, unveils ‘family’ plan, dark mode and more

We all fall down sometimes. Astronauts are no exception. You need to be in peak physical condition for space travel, but bulky space suits and lower gravity levels can be…

Astronauts fall over. Robotic limbs can help them back up.

Microsoft will launch its custom Cobalt 100 chips to customers as a public preview at its Build conference next week, TechCrunch has learned. In an analyst briefing ahead of Build,…

Microsoft’s custom Cobalt chips will come to Azure next week

What a wild week for transportation news! It was a smorgasbord of news that seemed to touch every sector and theme in transportation.

Tesla keeps cutting jobs and the feds probe Waymo

Sony Music Group has sent letters to more than 700 tech companies and music streaming services to warn them not to use its music to train AI without explicit permission.…

Sony Music warns tech companies over ‘unauthorized’ use of its content to train AI