Venture Capital has always been an industry that likes to play its cards close to the chest, and as such, there remains a lack of transparency and understanding about a great many things that go on within it.
Unsurprisingly, one of the most guarded secrets is industry salaries.
Primary among the reasons for this is the fact that, due to the radically different fund structures and sizes that exist within the industry, standardization has fallen by the wayside.
For instance, an associate at one venture capital firm could be on a completely different track than one at another firm, making it difficult for these peers to have comparable data as it pertains to how much they’re bringing home.
Now though, a salary survey conducted by venture capital expert John Gannon is shedding some light on this normally tight-lipped industry. Last year, the Massachusetts native who now lives in New York surveyed roughly 400 venture capitalists across nearly as many firms on salary information.
The survey found that managing directors and partners reported making an average of more than $300,000 per year, with 34 responses in this category.
"Venture Capitalists make a good living but the chances of achieving a life-changing financial outcome as a VC are as low as a VC's chances of funding the next WeWork or Uber."
Venture capital vice presidents reported making over $235,000 in annual cash compensation, while those with the same title at corporate VC firms reported even more at over $287,000.
Although principals can have similar job responsibilities as vice presidents, they did not report similar salaries.
Principals at financial VC firms in the survey said they were making an average salary of $215,000 per year, while people in these same positions at corporate VC firms were raking in about $196,000 annually.
Additionally, the survey found that senior associates — often those with an MBA or that had been promoted from analyst or associate — were pulling in $180,000 at financial VC firms and $168,000 at corporate VC firms. Notably, senior associates said these numbers included salary and bonus.
Slightly down a notch, associates reported making $153,000 in total compensation at traditional VC firms and $142,000 at corporate VCs.
VC analysts who responded to the survey were shown to be making between $79,000 and $94,000.
Interns at VC firms did not fare as well as the people they were working for. Roughly 54 percent of financial VC intern respondents said that they are not getting paid by the VC firms that “hire” them.
"Venture Capitalists make a good living but the chances of achieving a life-changing financial outcome as a VC are as low as a VC's chances of funding the next WeWork or Uber,” Gannon told American Inno. “Venture capital is a great industry and career path, but don't confuse it for a road to riches."
Gannon has been helping people break into venture capital for well near a decade. He runs a popular blog and newsletter that many consider the “LinkedIn of VC.” He is also the co-founder of GoingVC, a professional development program aimed at helping people take the next step in their venture capital careers.
Gannon’s survey did not just look at salary figures, but also examined other aspects of the VC pay package such as carried interest on investments.
Carried interest, referred to as “carry” for short, is the percentage of investment profits — typically between 20 and 30 percent — that partners at the VC firm get paid in addition to fund management fees. In most firms, carry is divided up between the general partners, although junior staffers occasionally get a small piece.
The survey found that less than half of respondents at analyst, associate, or senior associate levels had the potential to earn carry. For example, only 13 percent of analysts and 29 percent of associates in the financial VC respondent pool reported that they are entitled to receive carry.
It’s even less in the corporate VC pool — none of those analysts reported that they were allowed to participate in the carry pool.
The survey ran from November 2018 through March 2019. Responses were voluntary and about 10 percent of the roughly 400 total responses were excluded from the data analysis because of irregularities.
