A look at Option Impact, a salary database accessible to VCs and their startups, based on anonymized salary info from about 2,600 companies
we got a good deal."" http://www.wired.com/... @wired : This Silicon Valley database knows exactly how much tech companies pay their workers. But good luck getting access to it http://www.wired.com/... Adam Singer / @adamsinger : According to Glassdoor, a software engineer with 4-6 years of experience at a midsize San Francisco tech startup earns an average of $120,000. Option Impact pegs the salary closer to $141,000. http://www.wired.com/... [whispers: go for 200K at this level if you know you're good] Buzz Andersen / @buzz : Interesting story about Option Impact, a private salary database used and maintained by startup execs and VCs. Feels...a teensy bit like the sort of wage collusion that companies like Apple and Google got in trouble for in the mid-2000s? http://www.wired.com/... Daniel Tunkelang / @dtunkelang : A few people — and many companies — benefit from the information asymmetry around compensation, but most people lose out from the lack of transparency. http://www.wired.com/... Ana Milicevic / @aexm : Information asymmetry strikes everywhere, but especially in one's pocket http://www.wired.com/... Erica Joy / @ericajoy : I wish this piece were more in depth. I'd love to read abt how accurate OI data is, how many startups are using the data, how many startups are feeding in data, & how California's new salary disclosure laws might disrupt the OI based wage setting (& maybe their whole biz model). http://twitter.com/...
Context & Ripple Effects
Option Impact sits at the center of a widening information fight over startup pay. Employers pool anonymized salaries from about 2,600 companies behind a VC-gated wall, while candidates are left reconstructing offers from public tools — Glassdoor pegs a midlevel SF software engineer near $120,000 where Option Impact says closer to $141,000. The asymmetry cuts both ways: prospective hires have been pushing for disclosures like cap tables and liquidation preferences precisely because the equity half of an offer is as opaque as the cash half.
The database also feeds the same pay machinery that has drawn scrutiny elsewhere — founders extracting outsized packages from backers (wresting control from VCs) and CEOs of recently public startups topping public-company pay charts. Critics quoted around the story go further, arguing that a closed salary pool shared among hiring companies edges toward wage collusion.
First-order effects
- VC-backed startups get a benchmarking edge in setting offers — they can anchor cash compensation below what open-market data would support, since candidates see Glassdoor-level numbers while employers see the full distribution.
- Job candidates negotiating at these companies absorb the gap directly: their reference point understates market rates by tens of thousands of dollars at the levels Wired compared.
Second-order effects
- Public salary platforms like Glassdoor face pressure on accuracy — if employers trust a $141K figure that public tools can't show, the free tier loses credibility as a negotiation instrument.
- Candidates respond by demanding more of the disclosures they can get — cap tables, liquidation preferences, option-strike terms — shifting negotiation leverage toward whoever controls each side's data, and inviting antitrust-style scrutiny of pooled employer salary data given the collusion comparisons.
Third-order effects
- As IPOs delay and equity becomes harder to value, compensation setting migrates from open markets to closed databases — a structural split where employers share wage data among themselves while workers negotiate blind, the pattern labor regulators have targeted in other industries when employers pool pay information.
The trend: Startup compensation is becoming a contest over who owns the salary data — employers consolidating it in gated databases like Option Impact while workers and public platforms race to close the gap.