I have an opportunity to join a new seed stage VC fund by a successful entrepreneur in the Bay Area and I've been trying to figure out what comp structure and amount to ask for. It's a $60M fund with 1-2 GPs and I will be brought on as a Jr Partner/ Principal (but titles don't really matter since it's a small shop). They are offering me carry but I'm not sure what % carry and base comp + bonus I should be targeting.
A little background on myself, I have 2 yrs of experience in consulting and 1 yr in Ops & Strat at a Tech company in the Bay Area.
I know VC comp varies quite a bit across funds. Would love to get some thoughts on this from folks here.
I've been keeping an eye out for similar roles as well, and I've heard anything from all-in comp of $110-$170 as fairly typical. High risk high reward type situations, with the upside of carry.
Of course, I may have been getting the sales pitch, so take that with a grain of salt.
With that small a fund, I would guess comp would really depend on how the fund is to be structured. It could go anywhere between USD 80k base to 150k.
But I think the most important thing to keep in mind when joining small funds is that smaller funds typical don't do well in the VC world at all, so carry at the end of day might not be worth as much as you think. Unless you guys have a niche or you can pull 130k base or so I wouldn't join such a small fund.
Absolutely incorrect. Sub $150M funds have best returns.
Yeah but your management fees and carry DOLLARS are significantly less.
Agree with bobsfatburgers. At the seed stage you're targeting investments that will provide between ~50-200x return. However, that usually takes between 5-7 years if not longer to see any type of exit. Most analysts stick around for 2-3 years. You should be able to have a transparent conversation regarding fund structure, their payout, as well as the comp package you desire/they think is fitting.
However, be cognizant that most funds have a 2 and 20 structure i.e. 2% mgmt fee, 20% carry. If they're investing out of a $60mm fund, then they only have ~$1.2M to spread around 2 GPs and an analyst. I'm not as well suited to comment on the exact salaries of the GPs in the bay area, but it's fair that they will try to spread it out as much as possible.
I don't really see how you're entering as a 'Jr. Partner' or 'Principal' if you have 3 years of experience and 0 in VC. Either way, it's just a title.
With all that said, I'd 100% take the opportunity beacuse getting your foot in the door is the most challenging thing about VC. You won't know if you're any good for AT LEAST 7 years. Which, while wild, is pretty interesting because in 7 years you could easily have two funds under your belt and even a promotion or two (if you're actually good). The venture ecosystem is weird like that, but I'd really emphasize taking the offer just based on the sheer magnitude of difficulty when it comes to breaking in. From here you'll meet entreps, VCs, etc. and can get paid later.
Demand at least 3% carry. It's simple math to see that in even super opportunistic scenarios that doesn't come out to an outrageous comp figure.
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