Private Equity Tutorials
- Private Equity Basics
- What is Private Equity?
- Private Equity Analyst
- How to Get Into Private Equity?
- Private Equity Interview Questions
- What is Growth Capital?
- Term Sheet in Private Equity
- LP vs GP
- General Partner in Private Equity
- Carried Interest in Private Equity
- Clawback in Private Equity
- Preemptive Rights
- Drag-Along Rights
- Types of Alternative Investments
- Private Equity Course
- Private Equity vs Hedge Fund
- Project Finance vs Private Equity
- Private Equity Books
- Venture Capital Books
- Venture Capital
- Private Equity Firms
- List of Top Private Equity Firms
- Private Equity in India
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- Private Equity in France
- Private Equity in Germany
- Private Equity in South Africa
- Private Equity in UK
- Private Equity in Canada
- Private Equity in China
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- Private Equity in Hong Kong
- Private Equity in Brazil
- Private Equity in Dubai
- Private Equity in Mexico
- Private Equity in Australia
- Private Equity in Saudi Arabia
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
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.
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
- 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 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|
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
- Basic salary,
- Year end bonus and the last one is
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
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
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.
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.
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.
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.