NEW YORK — Incentiv, a startup that helps private equity firms hire and retain employees, has closed a $3 million seed funding round, led by venture firm Bowery Capital.
Incentiv’s journey began from a simple yet profound realization – compensation has gotten increasingly complicated, while the tools talent leaders have at their disposal to support their decision-making have not changed in years. After sitting through hundreds of board meetings and managing internal benchmarking data, Incentiv co-founder and CEO Matt Fanelli recognized that the current system for making executive compensation decisions was not only unsustainable but also leading to costly outcomes for both investment firms and their portfolio companies.
“From when I started as an associate in 2016, we were using a single spreadsheet of internal benchmarks across our firm to help us make million-dollar exec comp decisions on a weekly basis,” said Fanelli, Incentiv co-founder and former private equity investor at Permira Advisers. “Yet fast forward almost 10 years, as comp decisions have gotten increasingly complicated with nuances in equity plans, time vs. performance vesting, and employment terms, we were using the same spreadsheet which had ballooned in size, was impossible to keep up-to-date, and became a pain for our portfolio companies to engage with. The more I spoke with other leading investment firms, we quickly learned that we were not alone.”
Compensation is more than just cash and equity. It’s connecting the dots between individual and company-wide incentives to create a cohesive program that motivates an executive team and drives solid business performance. Yet getting access to relevant benchmarking data to help inform key decisions in the private markets is difficult, and the stakes have never been higher. As the talent war rages on, in any given comp decision millions of dollars are at stake – a 2% miss on a $50M comp package is $1M – and investors are making 100s of these decisions a year. Today it’s still common for investment firms to use a combination of survey reports, spreadsheets of internal benchmarks, and even intuition to inform these decisions but the process has become time-intensive, complex, and often incomplete.
The Incentiv platform was designed from the ground up to address the unique compensation and talent management challenges of private market investors. Our solution leverages innovative technology including advancements in generative AI to help investment firms and private companies accomplish three major things:
- Save time & money: Seamlessly collect relevant benchmarks to calibrate your decisions to the market – so talent leaders don’t overspend or under-motivate.
- Make better decisions: Access the most comprehensive set of metrics updated in real-time to inform decisions across all types of management incentives.
- Attract top talent: Land your dream exec team with data-driven offer packages.
“We’ve sat through hundreds of board meetings where executive compensation and talent decisions continue to arise. We’re often asked by our portfolio executives ‘what is market for [x]?’ and struggle to answer. The only solution we could trust seemed to be to collect data from our own portfolio companies but that process was manual and time-intensive – until now. Incentiv’s ability to seamlessly collect comprehensive, fresh, and trustworthy data within and across firms so board rooms can be confident in their decisions is a game changer,” said Loren Straub, General Partner at Bowery Capital. “We are thrilled to back Incentiv and look forward to seeing them transform how growth equity and private equity firms attract & motivate executive talent across their global portfolios.”
