VP Carry

Promoted late in fund cycle from Senior Associate to VP - had a small portion of carry at that role but biggest adjustment was to salary. The GP is 6 people (1 founder, 3 principals/MDs, 2 VPs). Assuming a $300m fund, what would one expect VP carry to be?

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Comments (14)

Jan 4, 2019

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Jan 7, 2019

Around 5% would be my guess.

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Jan 8, 2019

Any insight into what is market for vesting? In our prior fund, vesting for non-principals was 20/20/60 starting a year after the fund was raised. I've heard of up to 7 years, but vesting evenly. Hoping something in the middle is more standard.

Jan 8, 2019

So that's $5-6m total carry?

Jan 7, 2019

Four years evenly is common as well.

Carry is a long term play anyway imo. If you're looking to bounce after 3-5 then I wouldn't consider it a factor in your offer.

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Jan 8, 2019

What makes you say it isn't a factor if leaving in 3-5 years - if it's already vested wouldn't you ultimately still get the same amount of cash?

Jan 8, 2019

Not looking to bounce - fund size has doubled each of the last 3 funds (this will be the 3rd fund in 7 years so investing quickly) and has a great niche carved out in my opinion. More worried about the founder pushing a 7-10 year vesting schedule with a ridiculous non-compete which limits my options if things were to go south (see August Capital).

Jan 7, 2019

In the end, he can really offer whatever he chooses to. Do you have enough leverage to negotiate? Guess it'll boil down to that.

Jan 7, 2019

Well if the firm is in compete harvest mode, then yes I would agree. Reallly depends where the firm is.

Jan 8, 2019

Two firms I had offers from (both middle market) were 6 year and 8 year linear/even vesting.

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Jan 10, 2019

Couple quick comments, I'm in a somewhat similar situation from a fund and career perspective:

Vesting: my personal data point is 7 year linear

Carry: gut feel is roughly 2-4%. The Heidrick comp study for 2018 suggested that the middle 50% for VP carry dollars in $250-$500M funds is $900K - $2M, so on a $300M fund would be roughly 1.5% - 3.33%. So probably 2-3% is at least a reasonable guess.

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Jan 8, 2019

Thank you for the reply. Any insight into cash (base + bonus) and how it evolved over time?

Jan 11, 2019

I would think that vesting should correlate with the typical investment period for the fund, straight-line. So if its a 7 year investment period, then vesting over 7 years would make sense, hard to argue against that - doesn't make sense for you to be fully vested before the fund is invested, then you could bounce while others do the work that you would benefit from.

Jan 8, 2019