Comp of partners at top VC firms
At top VC firms, there seems to be an overload of partners. Even those who have only been there for a few years become partners.
What does comp look like for them? Is it cash+bonus+carry from investments that exit? Given that it takes years for investments to undergo an exit, does that mean that partners have to wait years before making seven figures+?
Top Bay Area multi-stage firms (think Greylock, LSVP, etc.) pay $650k-$1M cash comp and then depending on your tenure and track record as partner (let's assume junior level), low single digit % of the particular fund you are in. For early-stage specialists that's usually closer to $250-500k with more significant carry.
And yes, you have to wait to see your startups exit. I know partners who are 10 years in who STILL have not gotten a single meaningful carry check because the Series A in their big winner is still waiting to IPO.
For those reading this that might incline them to chasing venture - venture is a very, very stupid way to try and get rich. 85% of the folks at this firms basically had incredible undergrads, startup careers, or both along with finding a unicorn or two during the best tech bull market in history. It's also super hard to make partner and very few firms that pay as well.
PE and GE are much better paths on a probability/risk-adjusted basis to getting wealthy if you're an investor.
I like to think that people realize VC is a difficult path to wealth and that they are in it for the love of the game. Especially people who come from banking and PE backgrounds and could be doing PE or GE.
Kind of disagree with this — many partners are partners in title only. Firms started calling junior and mid level professionals partner late in the cycle because founders didn’t want to waste time with anyone that isn’t a partner. A16z and lightspeed are examples here.
Beyond that, carry aside, many Vc firms are raising funds at sizes that look like MM private equity scale. The elite firms have multiple strategies and multimillion funds, all charging 2.5% fees versus 1.5-2.0% for pe/ge. The lead partners at these funds are certainly getting paid in line with private equity partners.
That said, there are far more pe and ge funds at this scale and I wouldn’t disagree by any stretch with your overall point that pe/ge is better on a risk adjusted basis.
I think by “junior” he means “junior partner” and not “associate who has partner on his LinkedIn so founders will respond to a cold email until they find out he has no decision making capabilities”. The compensation he mentioned is in line with “junior partner” roles.
I don’t think, once the curtain is pulled back, anyone with a “partner” title is considered a partner. Most if not virtually all founders even know this at this point.
Agree 100% RedWhite. If we are talking about the top VC funds with scale, it's a great way to generate wealth. Just there are only so many of these.
Yes - I think you're thinking I did not factor in those nuances.
When the OP asked this said 'partners' I assumed he/she meant people who were actually partners and not in name only to actually be helpful. I also didn't include senior GPs that have been at a platform for years.
Yes, you are correct -you can be a 'Partner' at a16z but in reality you are internally a principal and not compensated as such. And yes, if you have been at a successful venture platform 20+ years you will have made more than your PE equivalents.
But if you are <45 y.o. and a partner you are making ~650-1M cash comp and low single digit carry and the figures I mentioned (perhaps slightly higher in cash comp and carry given '21 skewed numbers upwards) if you are at a well known fund.
With regards to specifics of carry (on your specific fund vs the broader platform), my guess is that is very difficult to ascertain as different funds will have different philosophies - so it is opaque but you will have at least ~$2-3M in carry at work that can scale even higher. Both the firms I alluded to have premium carry and fee arrangements and they still fall into this range.
I have 10-15+ datapoints from recruiters and professional contacts - it is this range in 85% of cases.
not saying you're wrong, but how would you know what partners at these firms make?
Corn Ferry can give you an okay baseline on comp. Carry splits are generally shared with LPs as is ownership of the management company.
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