U.S. investors receive more in compensation than their peers in Europe, Canada: survey

Next to IRRs, salary and carry distributions are perhaps the most important numbers at a venture firm and among the most closely-guarded.

The results of a new survey from entrepreneur and former L Capital Partners Associate John Gannon, who runs a venture capital job listing site, dispel some of the opacity surrounding compensation in the VC community, from GPs to interns.

In November and December 2017, Gannon gathered anonymous answers from about 400 venture investors at nearly as many firms, including corporate VCs and institutionally backed investors.

He’s released some of the survey’s findings, which break down the divergences among job titles, fund sizes and geography.

U.S.-based firms paid more in total cash compensation than firms in the European Union, United Kingdom and Canada when adjusted to U.S. dollars, and the percentage of respondents who reported receiving carry was higher for all positions at U.S. firms, as well, Gannon told VCJ.

General partners, along with similar titles like managing directors and venture partners, reported an average of more than $500,000 in salary and bonus alone, according to Gannon.

Vice presidents at venture firms reported an average of nearly $250,000 in cash, while their peers at corporate firms reported an average of $175,000.

Principals were just behind, with venture firm principals reporting $200,000 in cash compensation and principals at CVCs reporting $180,000.

More than 75 percent of those respondents said they are eligible for bonuses.

Among associates, respondents at corporate firms reported slightly higher compensation than their counterparts at venture firms, or $140,000 in total compensation compared with $130,000.

The reverse was true for senior associates, who reported salaries of $190,000 at independent firms while corporate senior associates reported $150,000.

More than 75 percent of respondents at that level reported being entitled to a bonus, while 40 percent of associates at venture firms reported being eligible for carry.

For analysts, the compensation is lower: between $60,000 and $80,000 per year, according to data from AngelList, with an average of just above $70,000 reported by the survey respondents.

Only a quarter of the analysts among venture firms reported that they receive carry.

But the bucks mostly stop there, among institution-backed firms.

More than half, or 54 percent, of interns at financial venture firms reported that they are not paid at all, the study found. On the other hand, all interns at corporate venture firms who responded to the survey reported being compensated. The same was true of all interns at European venture firms.

This is the first salary survey Gannon has conducted, and he plans to release one yearly. Gannon did not break down respondents by gender, he told VCJ, but may do so next year. He also plans to ask whether respondents who receive carry must pay into the fund to do so, and what percentage of carry they get.

The full results of the survey were shared only with respondents who submitted valid responses, but Gannon released a summary of his findings, which can be read on his blog at https://bit.ly/2jMfsA4.

Action Item: To get notified when John Gannon begins collecting data for next year’s survey, sign up here: https://bit.ly/2ryjgZX

Photo of a check being delivered in the office courtesy of AndreyPopov/iStock/Getty Images.