IB vs Tech Sales
What is everyone’s thoughts on comp in tech sales? My neighbor in apartment building makes 650k TC at 29.
I thought that was kind of crazy (especially for what he says is a 40 hour work week at most) but he said it’s semi-normal if not a little more than average.
Thoughts?
No one’s making 650k selling commoditized software. Your neighbor is bullshitting you, and if the perception is otherwise, he’s living above his means
I'm in sales at a large SaaS company - individual contributor reps can indeed earn well above $650k. RepVue says the top individual rep at my company earned $1.3 in 2022, which I don't doubt, knowing how the enterprise/strategics team can structure their deals. But it's heavily dependent on the macro. In 2021, we had a TON of $500k+ earners. 2023 had extremely few. Also depends on the company: in Salesforce's golden years, every enterprise region of 24 reps had 6-8 earning at least $500k.
I'm a new-grad SDR in software sales at a large, publicly traded SaaS company. My time to shine... and AMA, if you want.
Your neighbor is being disingenuous by calling that figure normal. A couple reasons: They're likely an enterprise account executive, which is typically the top 20% most tenured reps at any SaaS organization. Secondly, some context: the "standard" offer for an ENT AE role at a big SaaS company right now is 300-380k cash OTE (half base, half variable at exactly 100% of plan) + 10-50k per year in RSUs, depending on experience. There are some pinnacle golden roles like being a principal account manager at AWS where you manage a single F50 account and earn $300/yr cash + 250/yr RSUs = TC 550k, but these are few and far between.
Let's assume your neighbor is a ENT AE at a big org like Snowflake, Databricks, Salesforce. To earn $650k, he likely hit at least 200%+ of plan. Here's the math, assuming an OTE of 320.
0-100% - $160k commission
100-200% (1.5x accelerator) = $240k commission
200-225% (2x accelerator) = $80k commission. So...
$160k base + $480k commission + $10k RSUs = $650k.
He had to hit 225% of plan to earn that. Which brings me to the second point: RepVue is saying 41% of reps at Snowflake (again, example) are hitting plan. So 59% are earning less than their OTE of $320k. So he was probably the #1 person on his team, and honestly, given, the current macro, probably the top 2 or 3 reps in his second-line director's region. This brings me to my third point: comp in tech sales is incredibly dependent on the macro. From 2015-2022, for every team of 6 enterprise reps in a region, you likely had 2 who earned at least $400k, and one out of every region of 24 reps who earned $1M+. Fed funds rate goes up and deal activity dropped off a cliff - every team of 6 now has 2 reps who are only earning their base + RSUs, 3 who are between 30-80% of plan, and maybe 1 at 130%. $650k a year earners left and right won't come back until the fed funds rate drops back down.
For entry level SDR roles at somewhere like snowflake what would the general TC be?
Around $80k. The bottom half of SDRs who don't really care will wash out within a year, and the top half will promote within 12-18 months to be an SMB AE making an OTE of $130-150. Next step up is mid-market AE making $190-220. Step after that is the big leagues - Enterprise AE making an OTE of 300-380. If you're seriously thinking about tech sales, love talking to people and being a detective, assertive, put together business value presentations and deliver them confidently to junior executives, go for it. It will take 3-5 years of grinding through 80-200 comp, but when you break through the clouds to the Enterprise AE role you'll absolutely be able to earn 400-500+ consistently if you're a smart, Type-A person who can make a plan at the beginning of each fiscal to overachieve on quota.
And the work/life balance couldn't be more different from IB. In IB, a VP making $600k is in office at 11pm on a Saturday night, again, afraid of pissing off their MD. In tech sales, an Enterprise AE making $600k signs off work early on a Friday at 3pm, and won't open their work laptop again until 8:30am on Monday. They're above quota for the year and their deal pipeline is healthy, so their manager couldn't care less if they stop working at 3pm. How do I know? The AEs I cover don't answer their slacks after 3pm Friday....
^this. You’re an EXTREME outlier if you’re making this kind of money, especially in this market.
Tech sales is great. You hit upper 6 figures quicker.
But you don’t own the relationship and products are not 1 to 1 across firms like finance.
Obv exceptions. Some of the good tech sales guys are former bankers (ib, private wealth, etc) and can sell ice to an Eskimo
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