Venture Capital Jobs Blog

Curated by John Gannon and Team

2020 Venture Capital Salary Survey

with 25 comments

For the 3rd year straight, I polled my 18,000+ member VC Careers email list and others in the VC community to see how much salary, carry, and bonus they’re getting. 

400+ people working in VC responded across: 

And the results cover analyst, associate, senior associate, principal/VP, and partner-level roles.

(Click here to be notified about next year’s report)

Might make sense for me to start with some details on how VC’s get paid, first, though.

(Especially if you’re new to the industry)

How VCs make money

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3 things … salary, bonus, and carry.

Salary: is well, salary :)

It makes up the majority of a (non-intern) VC’s comp in any given year.

(I’ll explain that non-intern comment in a bit…)

Salary is usually paid out of a fund’s management fees. Most VC funds above a certain size will charge a 2% or 2.5% management fee for the active investment years.

Smaller funds will have lower management fee percentages. (And teeny tiny funds won’t pull any management fees.)

So, forget about the private jet if you’re working at a small fund. You’re straight Uber-pooling it.

This is because a firm that has $500k or $2 million (or even $5 million) under management isn’t going to have much — or any — cash lying around to pay you a full-time salary.

That’s why you see some VCs who run small funds doing side hustles to pay the bills while they wait for their bets – (I mean, investments) – to pay off.

Bonus: isn’t a given like it is in investment banking or other traditional finance shops. But many respondents (across all titles) say that they’re getting them.

Carry: is shorthand for carried interest (because ‘carried interest’ is sooooo painfully long to type).

It’s the percentage of investment profits (often 20%, sometimes 25% or even 30%) that the partners in the VC firm get paid in addition to fund management fees.

You might have heard this talked about as the 2/20 model – the (typically) 2% management fee and the (typically) 20% carry.

In most firms, carry is divided up (unevenly) between the General Partners…

…with a few table scraps for the junior staffers.

Carry

Of course, there are exceptions.

For example, firms like Benchmark Capital divide the carry equally between all partners. And according to some academic research, funds with an equitable split of the carry tend to outperform funds that don’t.

(First World) Problems With Carry

  • No realized profits == No carry (i.e. Paper gains don’t count, and cash returns need not apply)

“Carry” is typically only realized after the limited partners in the fund have received 1X of their invested capital back.

What’s left is the “profit,” and this is the money (the carry) that is divided up using the 20% / 80% distribution.

But if you’re keeping score:

You know that your average VC isn’t exactly generating great cash returns — so it’s pretty hard to get into that carry zone.  

After all, VC funds as of late have consistently underperformed the S&P 500, NASDAQ, and Russell 2000. A recent Kauffman Foundation study, cited in this GoingVC whitepaper, detailed VC performance as an asset class. They found that the majority of funds in their study, sixty-two out of 100, failed to exceed returns available from the public markets, after fees and carry were paid (The Lowercase Capitals of the world? They’re the exception, not the rule.) 

2) Just like a startup isn’t going to pile on the equity for someone who isn’t a founder — a VC firm isn’t going to offer up a share of the profits until you’ve proven yourself.

Most funds follow traditional structures and really need the math to work out in their favor before they even dream of paying their juniors something that could be considered substantial carry.

That said, there are many nuances to carry distribution, with some firms employing different mechanisms such as “cliffs” and “accelerations” (or a lack thereof) to incentivize partners and/or lower-level employees to remain at the fund longer – as this can often positively signal LP’s.

Still, as a general rule of thumb, most mid and low-level employees at a fund do not earn much carry.

The data from the survey bears all this out, too.

to be alerted

That said, there are many nuances to carry distribution, with some firms employing different mechanisms such as “cliffs” and “accelerations” (or a lack thereof) to incentivize partners and/or lower-level employees to remain at the fund longer – as this can often positively signal LP’s.

Still, as a general rule of thumb, most mid and low-level employees at a fund do not earn much carry.

The data from the survey bears all this out, too.

Less than half of respondents at analyst or associate levels had the potential to earn carry.

For example, only 11% of analysts and 39% of associates in the financial VC respondent pool reported that they are entitled to receive carry. These percentages were 13% and 29% respectively last year.

It’s even less in the corporate VC pool — only none of those analysts reported that they were allowed to swim in the carry pool.

But even if a fund ends up generating carry  — it takes a loooong time.

Why?

  1. Venture capital is a waiting game. For example, at the early stage, you’re looking at 10 years (i.e. the average VC fund’s life cycle) to see any meaningful returns on your investment.
  2. Venture is a highly illiquid asset class. Sure, you have shops like Industry Ventures and exchanges like EquityZen that can help investors take money off the table — but it’s far from the level of liquidity and transparency that you would see in the public markets.

You gotta pay (in some cases) to play.

General partners have a “GP commit” (often around 2% of the total fund) that they have to pay in.

If they don’t have a lot of cash lying around, then they’ll take out a loan to fund that GP commit (Thank god for Silicon Valley Bank). Or if they have enough management fees to draw from, they’ll use those to fund their commit and take a lower salary than they might have otherwise.

Makes sense, right?

If someone is thinking of writing you a check for millions, they probably want to see if you have some skin in the game. :)

But even if you’re not a GP, you can see this in action.

For example, one fund that I interviewed with had the junior staffers paying in for their carry — in order to get any (potential) carry out.

What this all sums up to is that, clearly, cash (compensation) is still king — and probably always will be — in the VC world.

And with all this (potential) money flying around (mostly) at the top, it only makes sense that the Associates and Analysts of the world want to climb the ranks… 

But therein lies a common point of friction in the VC world… 

To climb the ranks in a VC firm requires a proven track record and trust, on both ends of the table – and this isn’t always easy to come by.

Why?

  • Analysts/Associates want the deals they source to do well, so they can be biased when pitching these deals to an investment committee
  • There’s usually a gray area when it comes to who should get credit for a successful investment
  • There isn’t always transparency at a VC firm when it comes to financials and beyond

The good news?

At least in terms of that last point, we’re going to try and lift the veil.

How much money do venture capitalist partners actually make?

to be alerted

Let’s start with the General Partners – affectionately known as GPs.

Although Tom Perkins had that crazy space-age boat that he used to sail around in:

Tom Perkins BoatIt’s called The Maltese Falcon… because of course it is…

This is primarily because Partner salaries are largely dependent upon the size and age of the fund itself, with Partners in more established funds earning more — because their capital contributions into the fund will be much less.

But regardless of fund size… most partners still do OK for themselves. :)

For example:

We all know how much Ellen Pao made when she was working at Kleiner Perkins (yeah, same Perkins).

And that’s not too far off from what we saw in the 34 responses of Managing Director/Partner/Venture Partner types.

Between salary and bonus, those respondents are averaging over $300k/year (and much more carry, obviously).

Average salary for partners is down 7% over last year, from about $248k last year to about $228k this year. Please note that this year’s survey included a broader range of firms, including incubators and accelerators. Partner salaries at incubators and accelerators tend to be much lower, which brought down the average.

As we go farther down the food chain…

How much money do venture capital vice presidents and principals make?

In this year’s survey, we considered the VP title to be equivalent to Principal, given that both seemed to be used interchangeably depending on the firm type. 

The survey tells us that financial VCs are doling out about $195k in yearly average salary comp to folks at this level. This salary is up 12% over last year’s average salary of about $173k.

How much money do venture capital associates and venture capital senior associates make?

Associates come in two flavors – senior and … (just plain associate)

If you believe this Quora thread, they typically make about 10-30% less than their Growth Equity counterparts and about 10-40% less than consultants.

But you’re looking for some hard data…not hearsay :) So here it is:

In the survey results, we saw traditional VC associates pulling down an average of $145k in total compensation. The corporate VCs paid a shade more – $146k.

Average salary for Associates is up 5% over last year, from about $112k last year to $118k this year.

Senior associates are often post-MBA, or they’ve been promoted up from analyst and associate into the position. For this title, traditional VCs reported average yearly cash compensation of $205k, while the corporates clocked in at $186k average total comp for the same title. Note that this cash compensation average includes salary and bonus.

Average salary for Senior Associates is up 8% over last year, from about $136k last year to $147k this year.

to be alerted

What is a venture capital Analyst’s salary?

Not much to say here, other than that on average, analyst salaries spanned from $56k – $107kto $94k (depending on the type of firm).

Average salary for Analysts is down 3% over last year, from about $83k last year to $80k this year.

H1-B Salaries in Venture Capital

We didn’t ask people about their H1-B status in the survey, but we did find some data on the topic that might help you if you’re looking for a VC firm to sponsor you. In this article, Rohit Mittal took a closer look at how much money H1-B visa holders in venture capital were reported to have made.  As Rohit points out, salary highly depends upon the VC’s specific role at the firm.  

More on our methodology:

The survey ran from April 2020 through May 2020. Responses were voluntary.

About 12% of the ~400 total responses were excluded from the data analysis because they:

  • were outliers (would have heavily thrown off the analysis)
  • were not from people with relevant titles (e.g. if you’re a lawyer, you’re not a VC)
  • were single responses from planets(like that VC from Mars who responded — sorry, dude) or countries
  • were just plain invalid

We normalized some of the titles, too. For example, if someone said they were a “Venture Analyst” and someone else said they were an “Analyst”, we considered them both in the “Analyst” bucket.

We had to manually correct some of the fund sizes submitted. Some people had inputted “50m” instead of “50,000,000” for fund size, for instance.

No survey sampling techniques were used as there weren’t enough responses to produce statistically accurate results (large variance & the skewed distribution that I mentioned before). So we used simple descriptive statistics instead.

The responses related to cash comp were right tail skewed.

That skewness isn’t too surprising.

After all, most funds are smaller these days (because there’s been lots of growth in seed fund formation) and the GPs at those funds just don’t have a lot of cash to hand out to their underlings.

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After all, most funds are smaller these days (because there’s been lots of growth in seed fund formation) and the GPs at those funds just don’t have a lot of cash to hand out to their underlings.

to be alerted

See you next year!

Written by John Gannon

October 12, 2020 at 5:14 am

25 Responses

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  1. have any gender data to report? It would be interesting to see how the VC space compares to other industries here.

    Kamal Yechoor

    May 6, 2018 at 11:57 am

    • We didn’t ask for this data but maybe we will next time around, Kamal. Thanks for reading and appreciate you talking about and sharing the post if you saw value in it. Thanks!

      John Gannon

      May 6, 2018 at 12:38 pm

    • I second this and think its important, valuable, and timely data to gather + understand, for a myriad of reasons.

      Brad

      November 8, 2018 at 8:03 pm

  2. Great report! It sounds like you collected data on the percentage of non-partner investors with carry but I didn’t see anything about how much carry on average they were entitled to. Did you collect that data and if so could you share any numbers?

    VC Principal

    June 13, 2018 at 1:42 pm

    • Hey there – we asked “Did you get carry?” vs “How much carry did you get?”. Sorry we don’t have that data :(

      John Gannon

      June 13, 2018 at 1:48 pm

  3. Great report! Just wondering whether there are substantial differences among the VC fields (e.g. Biotech vs Tech or Fintech)…I confess it’s an interested question as I’m particularly interested in the biotech field :)

    VC intern (strangely decently paid :) )

    July 30, 2018 at 11:45 am

    • We didn’t do that split as we didn’t ask for people to report their vertical/type of typical investment. Maybe next year!

      John Gannon

      July 30, 2018 at 12:18 pm

  4. How is carry generally distributed when the fund has 4 or 5 general partners?

    Bill carpou

    August 11, 2018 at 4:40 pm

    • Most likely, unevenly :( Other than that, I don’t know of any guidelines. Sorry I can’t be of more help on this one, haven’t seen much (any) data on it.

      John Gannon

      August 24, 2018 at 5:20 pm

  5. Could you also please confirm the geographic scope of the survey? I am reading from Europe and would be interested to understand if these figures may be uses as references.
    Also, do you confirm that these wages are for seed / series A funds (VC funds), and that Series B/C/D (growth equity funds) funds should pay higher salaries?
    Many thanks !

    VC associate

    August 28, 2018 at 5:05 am

    • A large number of the responses (much more than half) came from US respondents, and we didn’t have breakouts by EU country (not enough data).

      The data was skewed towards smaller funds, so the comp numbers shared are definitely more slanted towards seed. So, yes, you might reasonably expect Series A+ funds to be able to pay more than what is listed. Of course, that depends on how well you negotiate :)

      Hope this helps!

      John Gannon

      August 28, 2018 at 5:21 am

      • Thanks! Interesting to read that there weren’t breakouts among € salaries – I would have expected to see significantly lower salaries in € countries. Would it be possible to look at the averages by seniority for € salaries as a group, for instance?

        Another VC associate

        February 14, 2020 at 5:06 am

      • Hey! Thanks for the feedback. In the full report we usually try to show the splits where we have enough data to make it meaningful. Will keep in mind for future surveys.

        John Gannon

        September 15, 2020 at 7:16 am

  6. surprised how low this comp is….VCs make nothing compared to HFs or PE

    JJ

    November 6, 2018 at 12:17 pm

  7. Great work! Did you observe much difference between average (mean) and median salaries?

    FMY

    February 12, 2019 at 8:35 pm

  8. Great info- thanks! Do you have Director of IR numbers?

    Diana Ren

    April 1, 2019 at 5:33 pm

  9. Do you have any salary data for VC marketing managers or other staff members not directly involved in the investing process?

    SH

    September 19, 2019 at 7:40 pm

    • Not enough to publish a meaningful benchmark, unfortunately.

      John Gannon

      September 15, 2020 at 7:19 am

  10. Would love to see the data broken down (even roughly) by AUM.

    patrissimo

    January 16, 2020 at 7:03 pm

    • We do this breakdown in the full report which respondents receive.

      John Gannon

      September 15, 2020 at 7:18 am

  11. Hi John, great post. Is there a chance to receive the report via e-mail?

    Anna

    January 25, 2020 at 6:19 pm

    • VCs who submit valid data to the survey receive a full report for the year in which they’ve submitted the data. Firms may also submit data for their entire firm, if they wish, and they’ll get the report for their whole firm’s use in that case.

      John Gannon

      September 15, 2020 at 7:18 am

  12. Hello! Any guess where chief of staff may fit in this data? Thanks!

    Hasti

    September 14, 2020 at 9:29 pm

    • Hey there – we didn’t cover that role unfortunately. Hard to say where it would fit. Sorry I don’t have a better answer on that!

      John Gannon

      September 15, 2020 at 7:16 am


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