IBD to VC: is it normal to take a large pay cut?
Hi,
Is it normal to take a large pay cut in both your base salary and bonus when moving to a VC fund from IBD? I’m currently a senior IBD analyst in London with total comp of approx £100k.
I’m interviewing with a VC fund for a senior analyst investment role offering total comp of £60-70k depending on both the funds and my performance.
That’s a pay cut of 30-40% to my current comp?
Is this normal for VC or is their pay very low / I’m being lowballed?
Pay is lower in my experience
What about after a couple years I.e a VC associate vs IBD associate?
Gap widens until Partner level where carry kicks in... but expected given the much better lifestyle
Yes, IBD to VC is typically a pretty large pay cut. You'll still give up on comp moving to PE, but less than VC.
Its common to get haircut in pay (at first) switching from sellside to buyside, but it comes with perks:
1: you'll be on top of the foodchain (well okay PE is on top of the foodchain, but VC comes second) -> people will beg you for money. 2: the hours are much better (actual weekends) 3: you'll learn how to really make investment decisions which will be beneficial for your own personal finances. 4: when the carry kicks in at higher level, the gap narrow down a bit 5: the feelings that you buy a good company and made it better, at the same time making money for your LPs is much better than IB: where you sell things you dont own, to people you dont really know.
Very common for smaller funds since there are less mgt fees to go around paying everyone.
It matters on the fund size and number of Partners. If you're going to a $50mm early stage fund, sounds right. If you're going to a $500MM fund you shouldn't be getting $60k. You're also not going to get carry in the fund, so I'd either try to get some points (if it's a small 3-4 partner shop) or higher salary.
Love the username btw
The VC firm has a total committed capital over $1bn and has recently raised its latest fund with $400m+ new capital ready to deploy.
The salary figures were in GBP (in London).
What salary & bonus would you expect for a senior analyst and associate at a fund like this in London? Do you feel they’re being stingy with their pay?
Quia quia qui suscipit. Est ea molestiae consequatur.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...