When Steve, a thirtysomething engineer, launched a software company in San Francisco a few years ago, he and his cofounder faced the daunting task of hiring a team, from low-level engineers to a new VP. Novices, they nonetheless had an advantage: access to Option Impact, an exclusive database of tech salaries that has become a go-to reference for Silicon Valley startups. That insider information, Steve realized, has immense value. “You get into the venture capitalist club and get all the magical data, which puts you in a power position,” he says. He recalls walking away from negotiations with a newly hired employee thinking, “Man, this guy is underpaid—we got a good deal.”
Unlike popular self-reported salary sites like Glassdoor or Stack Overflow, Option Impact is reserved for elite users—VCs and the executives at the startups they back (plus legal and consulting firms). And while salary surveys are routine across industries, Option Impact is unique in its specificity and accuracy. Companies share their employees’ anonymized salaries in exchange for access to the vault, which is searchable by job title, location, company size, revenue, and funding stage. Executives are required to update their entries every six months, and Option Impact vets its data regularly.
It’s now the world’s largest salary data set for startups. Roughly 2,600 private, VC-backed companies use it; Radford, its largest competitor, counted 2,115 public and private companies in its latest technology survey. Likewise, the majority of top VC firms—Andreessen Horowitz and Sequoia Capital among them—have access to the database.
Average salary estimates
1 to 3 years’ experience
Option Impact: $101,955
4 to 6 years’ experience Option Impact: $132,536
4 to 6 years’ experience
Option Impact: $137,000
4 to 6 years’ experience
Option Impact: $126,125
How that data is used depends on the client. “We view data as a commodity,” says Dee DiPietro, CEO of Advanced-HR, the company that developed Option Impact. The difference between what an applicant thinks they’re worth and what an Option Impact–equipped boss knows can be significant. According to Glassdoor, a software engineer with four to six 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. When competing for talent, that $21,000 split can provide the leverage needed to recruit candidates.
But according to Steve—who asked to use a pseudonym for fear of professional repercussions—the system also invites abuse. While closed databases like Option Impact can be used to ensure fair pay, they can likewise be employed to lowball less-savvy recruits, says David Burkus, an associate professor of leadership and innovation at Oral Roberts University. “Information is the key to being able to confidently ask for more money,” Steve says.
He should know. After leaving his startup last year, Steve was offered a new position as a software engineer. The salary was $180,000—not bad. “Honestly, I probably would have taken the original offer,” he says. But Steve had an edge. Using his previous company’s login info, he checked Option Impact’s rates. What he found made him tell his prospective bosses they’d have to do better. His eventual starting salary: $205,000.
Rachel Nuwer (@RachelNuwer) is a freelance writer living in Brooklyn.
This article appears in the June issue. Subscribe now.