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?

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Comments (9)

  • Analyst 2 in IB - Ind
Nov 20, 2019 - 6:47pm

What about after a couple years I.e a VC associate vs IBD associate?

Most Helpful
Nov 21, 2019 - 12:50am

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.

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Nov 21, 2019 - 10:49am

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.

  • Analyst 2 in IB - Ind
Nov 22, 2019 - 9:09pm

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?

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