The labor markets, especially in the technology sector, are incredibly inconsistent with employees. Companies review, interview and negotiate with thousands of candidates each year, while employees may only recruit a few times in their lives. Inevitably, they can pick the wrong positions, pick the wrong managers they work with, and end up getting a salary that is way below the market price.
The New York City-based Free Agency wants to be the lawyer of choice for this high-priced talent. The aspiring startup is based on Hollywood and the sports world and would like to identify great employees and offer them career advice, interviewing and negotiation skills so that they can do their best work – and at the right wages.
The company, founded by Sherveen Mashayekhi and Alex Rothberg last year, told TechCrunch exclusively that it has now reached 100 "free agents" on its platform. It was also announced that it had made a total of $ 5.35 million seed investment led by Resolute Ventures and Bloomberg Beta last year.
How Free Agency works is simple. In return for helping the service find and negotiate a career change, the startup receives 5-10% of its client's salary in its new company in the first year. For example, if the average tech salary for top companies is $ 200,000, that would be a $ 10,000 to $ 20,000 fee.
That may sound exorbitant, but it is anything but for the founders of Free Agency. They believe that many employees regularly fail to find the best companies to work for and negotiate the best salaries, which means that their potential customers leave a significant amount on the table.
"Our business model keeps us incentive-oriented with the candidate, driven by results rather than advance payments," said Mashayekhi, the CEO. "But it is also important to know that the Free Agency is also philosophically geared towards the wishes of the employers. Satisfied candidates who feel fairly paid stay longer in their jobs and contribute to more productivity. We make happy candidates. "
In many ways, Free Agency is a parallel to the emergence of income share agreements (ISAs) in the Edtech world, about which my colleague Eric Peckham has written extensively in recent months. Instead of tuition fees, some new startups are using ISAs to guarantee students better employment outcomes while limiting their debt burden. Their growing popularity has sparked considerable investor interest.
Today Free Agency is barely a year old and has only 11 employees. In the longer term, the company wants to manage the emerging careers of tech employees as Hollywood agents often do: find new projects that support the talent to develop their own skills, brands and thinkers and to network with them as decision-makers asked when new opportunities arise.
"Today we focus mainly on the turning point in job hunting, but Free Agency is truly a part-time partner. You will see that we continue to add ways to help our free agents succeed in partnerships through deliberate career management in five or ten years “Said Mashayekhi.
There are talent agents in industries such as Hollywood, book publishing and sports because the talents themselves often do not want to take the burden of shaping their own careers. Film directors and baseball pitchers want to practice and improve their craft instead of spending hours negotiating with studio managers and club owners. The agents are also more up to date with regard to the salary development in the industry and also where new opportunities arise. They also often work with talent managers to optimize any additional income from these careers (product recommendations, speaking engagements, etc.).
In addition, these industries have an extremely strong superstar income pattern where top talent can easily make tens, if not hundreds, of millions of dollars over the course of their careers.
While the tech industry traditionally had no agents, tech talent has increasingly similar superstar traits. Star engineers, product managers, and designers can earn tens of millions of dollars from salary and equity packages, and often have a range of additional sources of income, from advice meetings with VC companies to lectures on round payments. What's even better is that young talent is often in the six-figure range, while the first few years of an entertainment or sports career often aim to secure a paid job.
It remains to be seen whether engineers are willing to give up part of their income in order to get better career support. Free Agency is certainly not the first company to attempt to address this emerging area. 10x Management is a talent agency that specializes in testing top developers and was introduced at The New Yorker a few years ago. In the past ten years, other start-ups have also entered the room.
Free Agency believes it has the right time and the right quality of service to enter this market. I expect models like Free Agency to become more popular at a young age to manage our careers. This is a startup that should be given special attention in the coming years.
In addition to Resolute and Bloomberg, Ludlow Ventures, Background capital, Parker Thompson, Will Oberndorf, Amrit Saxena, Jenny Fielding, Greg Schroy, Gordon Wintrob and Orrick LLP also joined the group as investors.