For the 5th year straight, I polled my 20,000+ VC Careers subscribers and others in the VC community to see how much salary, carry, and bonus they’re getting.
Over 515 people working in VC responded across:
- Institutional VCs
- Corporate Venture Capital teams
- Incubators + accelerators
- Family Offices (that often act like VCs)
And especially the 12 Supporting Firms who submitted firm-level data, including:
And the results cover analyst, associate, senior associate, principal/VP, and partner-level roles.
It might make sense for me to start with some details on how VCs get paid, first, though.
How Do VCs Make Money? (VC Comp Structure)
There are 3 pieces that make up the compensation structure of a VC:
Salary is, well, salary.
It makes up the majority of a (non-intern) VCs comp in any given year.
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.)
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.
And significant ones too.
More on that later.
Carry is shorthand for carried interest.
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 and 20” model – the (typically) 2% management fee and the (typically) 20% carry.
In most firms, carry is divided up (often, unevenly) between the General Partners…
…with a few table scraps for the junior staffers.
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.
When do VCs get 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 over 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.
Typically, VCs don’t get carry until they climb the ranks…but more on that to come.
How often do VCs get carry?
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 detailed VC performance as an asset class.
They found that the majority of funds in their study, 62 out of 100, failed to beat public market returns after fees and carry were paid
Who gets Carry in a VC firm?
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.
Less than half of respondents at analyst levels had the potential to earn carry.
How long does it take to receive Carry?
But even if a fund ends up generating carry — it takes a loooong time.
- 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.
Why is Carry “pay 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.
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…
How can you get more Carry?
But therein lies a common point of friction in the VC world…
To climb the ranks in a VC firm and go further down the venture capital career path requires a proven track record and trust, on both ends of the table – and this isn’t always easy to come by.
- 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.
2022 Venture Capital Compensation Trends
On average, total compensation was higher in 2022 than we’ve ever seen in this survey.
Surprisingly, corporate VC folks in Analyst, Associate, Senior Associate, and VP/Principal roles reported earning similar – sometimes even more – total cash compensation (salary + bonus) as compared with peers working in traditional VC.
However, at the Partner level, traditional VCs earned more in both total cash compensation and carry.
Typically, the higher the firm’s AUM, the higher the compensation – especially at the Late Stage & Growth Equity and Stage Agnostic Firms
Venture Capital Compensation by Job Title
How much money do venture capital Analysts and venture capital Senior Analysts make?
Analyst / Senior Analyst base salaries varied widely, ranging anywhere from $25,000 – $150,000 depending on the type of firm.
That said, the average base salary for Analysts is up 21% from last year, dropping from about $80K last year to $92K this year.
How much money do venture capital Associates make?
In the survey results, we saw venture capital Associate salaries ranging from $60,000 – $255,000.
Average base salary for Associates is up 23%, from about $111K last year to $137K this year.
How much money do venture capital Senior Associates make?
For VC senior associates salaries ranged from $74,412 – $250,000 according to the survey.
Average base salary for Associates is up 10%, from about $140K last year to $154K this year.
How much money do other roles in venture capital, which are more senior than senior associate (but not Partner level) make?
For other VC roles, more senior than Senior Associates but not Partner level, salaries ranged from $0 – $400,000. Many roles with $0 base salaries were carry-only positions. This is more typical in more senior positions, where the amount of carry is significant.
Average base salary for these roles was $193,111. This was the first year we opened up this category of jobs, so we don’t have comparative data from over the years.
How much money do venture capital Vice Presidents and Principals make?
In the survey results, we saw VC VP / Principal salaries ranging from $65,000 – $450,000.
Average base salary for Vice Presidents / Principals are up 7%, from about $182K last year to $195K this year (a return to 2020 level).
How much money do venture capital partners make?
According to the survey results, venture capital partner salaries ranged from $0 – $1,000,000. Many roles with $0 base salaries were carry-only positions. This is more typical in more senior positions, where the amount of carry is significant.
Average base salary for Partners is up 7%, from about $182K last year to $195K this year – the highest it’s been in the past 4 years.
How much money do platform roles in venture capital make?
We considered a role “platform” when it was a role within marketing, community, investor relations, etc. within venture capital firms.
For venture capital platform roles, salaries ranged from $80,000 – $400,000.
Average base salary for these roles was $176,177. This was the first year we opened up this category of jobs, so we don’t have comparative data from over the years.
Methodology and Limitations
The survey was first made available on Dec 10th, 2022 and was closed on January 6th, 2023.
All responses were voluntary – that comes with an inherent bias.
12 Firms submitted data for their entire firm – which amounted to 79 responses
Of the 549 total responses, 23 were deleted and 11 were for venture capital scouts (omitted from this report), leaving 515. Those 34 responses were removed for the following reasons:
- Invalid positions (e.g. working at a startup, not a VC firm)
- Suspicious / Errant Compensation Data
- Scouts not included in this report
- Clearly erroneous responses
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.