Venture Capitalist Salary

Venture Capitalist Salary – Venture Capital Firms primarily invest in start-up companies and make money by exiting i.e. generally selling their investments. Venture Capitalists expect that many of the companies they invest in will fail. But the hope here is that at least one investment will generate huge returns and make the entire fund profitable. This big gains in one investment can lead to extremely high returns to the firm and to the fund managers and analysts.

Venture Capital Salaries are generally higher that most of the Financial Analyst roles across the domain. In this article, we look at the details of what is venture capital, their roles and more importantly an in depth analysis on Venture Capitalist Salaries.

The article is structured as per below –

• What is venture capital?
• What does a venture capitalist actually do?
• Job profile of venture capital associate
• Top Venture Capital Firms
• Venture Capitalist Salary
• Venture Capitalist Salary in US
• Venture capitalist Salary in India
• Conclusion

What is venture capital?

---

Venture capital is also very rightly known as the seed capital.

• It is funds provided to companies that are very new in fact just starting up however have very high potential of growth in the market.
• The funds of venture capital invested in by the investors make money by making sure he investors have equity shares in the company in which the investment is made.
• These companies are the ones that are typically experienced and have their expertise in business certain businesses which are based in very fast growing industries these industries can be the mobile technology, the IT or the biotechnology, etc.
• This venture capital is funded mostly after the first round of funding.

A venture capital is very closely related to a private equity firm; however in this case the funds are raised in a very advanced stage of the business very close to the startup when compared to a private equity investment. These companies are usually companies who have not yet reached a stage where any investor can finance them or will finance them. (see the difference between Private Equity vs Venture capital)

Here in this situation a venture capitalist who invests in a startup in return of high risk gets a particular control over the decision making of the company along with the equity ownership of the company.

Companies who start up with healthy unique ideas businesses and obviously need funds to grow; this is where venture capitalist who are big investors with spare money step in to fund the business for a long term. Hence venture capitalists are also known as angel investors.

You want to play games in the market you need to make sure you play it right as such investments involve very high risk. And high risk can fetch you very high returns if you choose the right option for investment.

Recommended Courses

What does a venture capitalist actually do?

---

Striking deals and sourcing of finance of a venture capital company is very similar to that of a private equity companies; however they have a difference in the types of companies they fund. For example, private equity firms finance attract companies that have established their businesses be it a small company or a large one; whereas a venture capital company will only target a startup organization. It was very important to give this difference here because this difference is the only one that defines the role of a venture capital associate.

The two main job roles of a venture capital associate is

Sourcing deals

• Being in the front line your job will be to find and screed deals. It’s like sales you have to find the right deal by cold calling the organizations and their entrepreneurs and fixing up meetings.
• Once the deal is understood and its screening is done the prospect deal is then presented to the partners of the firm.

Plays the role of existing deal support

• Like any other finance analyst the role of a venture capital associate is to support the deal in every aspect right from the due diligence to modeling the deal and executing the same.
• Due diligence is a part where the analyst produces a report that may lead the firm to either accept or reject the proposal.
• The associate of a venture capital works very closely to monitor on how close is the VC firm in closing the deal.
• Unlike other associates of the finance industry a VC associate works for very long hours in closing the deal.
• However with the added efforts comes a very good compensation for a VC associate.

Job profile of venture capital associate 

---

A venture capital associate can work under the following designations.

An analyst –  a VC analyst is a person who looks for deals, prepares the financial model, does the financial analysis, or screens them before presenting them to the VC firm.

An associate –  where as an associate will make sure he closely monitors the entire deal right from the start till the end he will manage the deal himself.

Where analysts and associates are juniors they are followed by senior managers who are the principles and partners of the VC firm who execute the deals and give a green signal to funding the venture.

Top Venture Capital Firms

---

Below is a list of notable venture capital firms.
3i	Galen Partners	Morgenthaler Ventures
Advanced Technology Ventures	General Catalyst	New Enterprise Associates
Accel Partners	Genesis Partners	Nexit Ventures
Andreessen Horowitz	Golden Gate Ventures	Norwest Venture Partners
Atlas Venture	GGV Capital	Oak Investment Partners
Atomico Ventures	Google Ventures	OpenView Venture Partners
August Capital	Granite Ventures	Polaris Partners
Austin Ventures	Greylock Partners	Quicksilver Ventures
Avalon Ventures	Harris & Harris Group	Radius Ventures
Azure Capital Partners	HealthCap	Redpoint Ventures
Bain Capital Ventures	Highland Capital Partners	Walecka, Geoff Yang, Marjorie Yang, David Yuan and Vivian Yuan
Balderton Capital	Horizons Ventures	Early stage Information Technology
Battery Ventures	IDG Ventures	Revolution LLC
Benchmark Capital	Initialized Capital	Rho Ventures
Bessemer Venture Partners	Iona Capital	Montreal
Binary Capital	In-Q-Tel	RRE Ventures
BitChemy Ventures	Index Ventures	Rothenberg Ventures
Black Coral Capital	Innovacom	Santé Ventures
Canvas Venture Fund	Insight Venture Partners	Scale Venture Partners
Carmel Ventures	Intel Capital	Shenzhen Capital Group
Charles River Ventures	Intellectual Ventures	Scottish Equity Partners
Clearstone Venture Partners	Institutional Venture Partners	Sequoia Capital
Columbus Nova Technology Partners	Internet Capital Group	Seventure Partners
Costanoa Venture Capital	Inventus Capital Partners	Sevin Rosen Funds
Crosslink Capital	Israel Cleantech Ventures	Social Capital
CrunchFund	Jerusalem Venture Partners	Sofinnova Ventures
DAG Ventures	JMI Equity	SoftTech VC
Data Collective	Kapor Capital	Spark Capital
Digital Sky Technologies	Kleiner, Perkins, Caufield & Byers	Tenaya Capital
Draper Fisher Jurvetson	Khosla Ventures	Third Rock Ventures
Elevation Partners	Knife Capital	Union Square Ventures
ff Venture Capital	Lightspeed Venture Partners	U.S. Venture Partners
Fidelity Ventures	Lux Capital	VantagePoint Venture Partners
FirstMark Capital	Matrix Partners	Venrock
First Round Capital	Maveron	Wellington Partners Venture Capital
Flybridge Capital Partners	Mayfield Fund
Foundation Capital	Menlo Ventures
The Founders Fund	Meritech Capital Partners

source: wikipedia.org

Venture Capitalist Salary

---

Now comes the main part; that is the remuneration or your compensation and to be more precise your salary as a VC associate. All of us like numbers don’t we let’s talk numbers…

Venture capitalist earns money in three ways and these ways are

1. Basic salary,
2. Year end bonus and the last one is
3. Carry.

Now we are sure you know what means by a salary and a bonus. The question you will ask here is what is carry? Let me answer this for you; Carry is the incentives fees charged on the profit earned. Think of this as the percentage amount of profit that goes to the fund managers. Normally, the concept of carry comes into picture once the VC has delivered the minimum hurdle rate of return to the investors. Thereafter the profits are normally shared via Carried Interest.

Related Job Salaries just an idea

source: payscale.com

We’ve brought together the figures of remuneration of venture capital associates in two locations one is The United States of America and the other one is Asia mainly India.

Venture Capitalist Salary in US   

---

We have rough figures given below as the compensation of a venture capitalist as per their designations starting right from an associate to the Managing Director of the company. The compensation usually weighs more towards their carry bonus compensations. Your work hours are completely industry specific however the work hours are much less than an investment banker. Usually the venture capital firm’s senior management has a variable salary for they carry a heavy weight age on their carry bonuses and that fluctuates with the performance of the company.

Take a look at the numbers below

• An Analyst earns close to $ 80K to $ 150K.
• An Associate earns close to $ 130K to $ 250 K.
• The Vice President gets a salary near to $ 200K to $ 250K + $ 0-1MM carry bonus.
• The Principal or the Junior MD draws $ 500K to $ 700K + $ 1-2MM carry bonus.
• The Managing Directors and the partners draw approximately $ 1MM + $ 3-9MM carry bonus.

These numbers are rough as the remuneration varies from company to company and industry to industry. Depending on the size and the specialization of the VC firm the salaries and the bonuses vary. In general as a pre MBA VC analyst or an associate can expect an annual salary of $ 80,000 – $ 150,000 and if you include a bonus you can add a certain fixed percentage which will sum your salary up to $ 86,000 to $ 250,000along with a medium of $ 170,000. The company also compensates the associate for sourcing a deal or finding a deal. As you level increase increases your bonuses with an involvement of carry in your portfolio.

A chart below will be of some help we hope

source: Payscale.com

Venture capitalist Salary in India

---

Unfortunately every location across the globe does not share a similar remuneration. The VC associates in India defiantly do not have a remuneration to be envy of. In fact the lowest level the salaries can be really too low to be a venture capitalist.

An Analyst

Thankfully at this level you need not be an MBA pass out from a very big or a very expensive institute. In fact a many firms hire fresh MBA graduates at campus interviews for a package of INR 10-15 lacs.

An Associate    

Here the salary of an associate is almost double than that of an analyst and hence he may draw anywhere between INR 20lacs to INR 30lacs. Well at this level in India or anywhere the associate is not eligible for carry which is the most tempting part of a VC’s job. And in case they are eligible the numbers are not quite appealing.

In fact there are very few companies which are the top brands who are filled with money may be generous with their junior staff.

The Vice President or Principal

Here there is a huge difference between the base salary of the juniors seniors. As the grade increases, increases the remuneration of the employees of the VC firm. This is mainly because it all depends on the size of the fund, the track record and the credentials of the Principal and how much or how desperately the VC firm wants to retain him.

You can say that the base salary here is close to INR 30lacs to INR 50lacs however the base salary is easily over overshadowed by carry bonus at this level.

Junior MD’s, MD’s and Partners.

To go up to this level and taking home a few corers might be or is a dream of every venture capitalist. However here the funds are the real performers at this level of a VC firm, for it is all your performance and your effort that you have put into the ventures all this years which will not let you regret a relatively slow start to your career.

There are a number of people who have been partners in VC firm and have decided to become independent investors and invest from their own amount. Whereas people who prefer sticking around with a huge brand name prefer raising bigger funds through their income that includes big and huge carry.

Conclusion

---

We hope this article has been of good help to you for we have tried our best to serve your motive of giving you information about the venture capital and its remuneration. A reasonable description of venture capital gives you an idea about the study topics that you will be considering in your next few years along with what remuneration can you expect for yourself at what level and in which part of the globe.

Like we said earlier it is very important for you to know the details of the course before you register for one. And we have tried our best to give you the required details.