Venture Capitalist Salary

Salary of Venture Capitalist

Venture Capitalist is the person who undertakes the work of the venture capital and generally for the position of the venture capitalists annual salary between the ranges of $ 80,000 to $ 150,000 along with the bonus is expected according to the data available on the site of Wall Street oasis.

Explained Briefly

Venture Capital Firms primarily invest in startup 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 significant 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 than most of the Financial Analyst rolesFinancial Analyst RolesFinancial analysts analyze the financial data and other relevant information and provide valuable insights to the management for better financial decisions. In addition, they diagnose the economic conditions, company’s performance and fundamentals to forecast future performance and recommend a course of action.read more 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 of Venture Capitalist Salaries.

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

Salary of Venture Capitalist

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Source: Venture Capitalist Salary (wallstreetmojo.com)

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 incentive 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 the picture once the V.C. has delivered the minimum hurdle rateHurdle RateThe hurdle rate in capital budgeting is the minimum acceptable rate of return (MARR) on any project or investment required by the manager or investor. It is also known as the company’s required rate of return or target rate.read more of return to the investors. Thereafter the profits are normally shared via Carried Interest.

Venture Capitalist Salary

source: payscale.com

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

Venture Capitalist Salary in U.S.   

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 heavyweight 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 V.C. firm, the salaries and the bonuses vary. In general, as a pre-MBA V.C. 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 dealSourcing A DealDeal Origination is a strategy used by firms to find investment prospects, either by gaining industry knowledge or by forming a deal for themselves using their connections with the involved parties.read more or finding a deal as your level increase increases your bonuses with the involvement of carrying in your portfolio.

A chart below will be of some help we hope

Venture Capitalist Salary

source: Payscale.com

Venture capitalist Salary in India

Unfortunately, every location across the globe does not share a similar remuneration. The V.C. associates in India defiantly do not have a remuneration to be the envy of. In fact, the lowest level of 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, 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 carrying, which is the most tempting part of a V.C.’s job. And in case they are eligible, the numbers are not quite appealing.

In fact, there are very few companies that are the top brands that 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, it increases the remuneration of the employees of the V.C. 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 V.C. 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 carrying bonus at this level.

Junior MD’s, M.D.’s, and Partners.

To go up to this level and to take 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 V.C. firm, for it is all your performance and your effort that you have put into the ventures all these 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 V.C. firms and have decided to become independent investors and invest from their own amount. At the same time, people who prefer sticking around with a huge brand name prefer raising bigger funds through their income that includes big and huge carry.

Top Venture Capital Firms

Below is a list of notable venture capital firms.

3iGalen PartnersMorgenthaler Ventures
Advanced Technology VenturesGeneral CatalystNew Enterprise Associates
Accel PartnersGenesis PartnersNexit Ventures
Andreessen HorowitzGolden Gate VenturesNorwest Venture Partners
Atlas VentureGGV CapitalOak Investment Partners
Atomico VenturesGoogle VenturesOpenView Venture Partners
August CapitalGranite VenturesPolaris Partners
Austin VenturesGreylock PartnersQuicksilver Ventures
Avalon VenturesHarris & Harris GroupRadius Ventures
Azure Capital PartnersHealthCapRedpoint Ventures
Bain Capital VenturesHighland Capital PartnersWalecka, Geoff Yang, Marjorie Yang, David Yuan, and Vivian Yuan
Balderton CapitalHorizons VenturesEarly-stage Information Technology
Battery VenturesIDG VenturesRevolution LLC
Benchmark CapitalInitialized CapitalRho Ventures
Bessemer Venture PartnersIona CapitalMontreal
Binary CapitalIn-Q-TelRRE Ventures
BitChemy VenturesIndex VenturesRothenberg Ventures
Black Coral CapitalInnovationSanté Ventures
Canvas Venture FundInsight Venture PartnersScale Venture Partners
Carmel VenturesIntel CapitalShenzhen Capital Group
Charles River VenturesIntellectual VenturesScottish Equity Partners
Clearstone Venture PartnersInstitutional Venture PartnersSequoia Capital
Columbus Nova Technology PartnersInternet Capital GroupSeventure Partners
Costanoa Venture CapitalInventus Capital PartnersSevin Rosen Funds
Crosslink CapitalIsrael Cleantech VenturesSocial Capital
CrunchFundJerusalem Venture PartnersSofinnova Ventures
DAG VenturesJMI EquitySoftTech VC
Data CollectiveKapor CapitalSpark Capital
Digital Sky TechnologiesKleiner, Perkins, Caufield & ByersTenaya Capital
Draper Fisher JurvetsonKhosla VenturesThird Rock Ventures
Elevation PartnersKnife CapitalUnion Square Ventures
ff Venture CapitalLightspeed Venture PartnersU.S. Venture Partners
Fidelity VenturesLux CapitalVantagePoint Venture Partners
FirstMark CapitalMatrix PartnersVenrock
First Round CapitalMaveronWellington Partners Venture Capital
Flybridge Capital PartnersMayfield Fund
Foundation CapitalMenlo Ventures
The Founders FundMeritech Capital Partners

source: wikipedia.org

What does a Venture Capitalist Actually Do?

Striking deals and sourcing of finance of a venture capital company is very similar to that of 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 venture capital works very closely to monitor how close is the V.C. firm in closing the deal.
  • Unlike other associates of the finance industry, a V.C. associate works for very long hours in closing the deal.
  • However, with the added efforts comes very good compensation for a V.C. associate.

Job profile of Venture Capital Associate 

A venture capital associate can work under the following designations.

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

An associate –  whereas 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 V.C. firm who execute the deals and give a green signal to funding the venture.

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 you can 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.

Reader Interactions

Comments

  1. Conner Sanders says

    Very informative. Thanks for this article. I also have a small query, I will be glad if you can give answer to the following. Is there any difference between Private Equity and Venture Capital? Can you explain?

  2. Garrett DAVIDSON says

    Thanks for providing such a useful article. I really appreciate your work. Can you state some Exit Opportunities of Venture Capital?

    • Dheeraj Vaidya says

      Thanks Garrett. I am glad you find the articles on wallstreetmojo useful. There are many Exit Opportunities for Venture capitalists – they are as follows
      1. Mergers and Acquisition (M&A)
      2. Sales to other strategic investor/venture capital fund
      3. Start their own business :-)

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