VC Partner Compensation - How Much To Ask For?
A friend of mine is being offered a Partner position at a tech-focused VC fund in Europe. For context, this would be their second fund and are looking to raise the equivalent of $75-85M for it. My friend has a mixed background, having come from the C-suite of 2 tech start ups he co-founded and as an advisor to other tech VCs in the past. This new VC fund has asked him to draft a compensation package for them to mull over.
What would be appropriate here? My initial thoughts (as someone not in the field) is to make base play relatively low and push more for variable pay based on performance. Something like $300K + Bonus + 10-15% Carry? Does that seem reasonable?
Quick thoughts
- Cash comp you have listed is quite high for a fund of that size. Not sure how many associates, partners, etc.
- He should ask for more carry to start. The fund isn't even raised
- Think carefully on vesting and triggers. Your friend is not going to see his first carry check for 8-10 years (unless this is a crypto fund haha). 7 years is standard in the US but for partners and your friend's situation is different.
Would agree base comp for a microcap fund even as a GP should be around $200K
There is no way that a seed stage VC (I assume this is the stage given relatively low fundraise numbers) is going to pay a partner $300K / year base lol.
Think more of $150-200K (and that's really pushing it). If they didn't really raise yet, then he can ask for a larger carry upside.
In general - you will not make millions as a small cap VC partner in a tier 2-3 fund, especially in Europe. Base salaries are low (or rather proportional to fund sizes) and it's gonna take years for the first carry check to hit.
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