VC’s vs Entrepreneurs, which cohort tend to earn more?
It’s just what you’d think.
The “average” VC probably makes a $500k salary (some less, some far more). At a tiny VC firm, the salary might be $50k (or even $0). At a large firm, it might be effectively $1.5m-$2m.
But … the average VC fund doesn’t return all that much carry, or profit.
A top 25% VC fund will hit 2x net (i.e., double the capital it is given to invest, after paying back all those salaries and fees). So that might make an average partner $10m over the course of a decade. Which is more than a founder will probably make from a “pretty good” exit, although this can vary widely, depending on dilution, # of founders, etc. etc.
And very, very, very few VCs are billionaires. Very few. And only a relatively small handful are centimillionaires.
‘Cuz owning an effective 1% of Google is really, really great but not the same as owning 20%.
- So a top founder takes much more risk, at least on paper, at least sort of. But can make a lot more than even the best VC of all time.
- A pretty good VC probably makes more than a pretty good and successful founder.
- A mediocre VC makes a lot, lot, lot, lot more than a mediocre founder and if lucky and has good partners, can make more than a pretty good and successful founder.
So. Don’t be jealous of VCs if you are a great founder-to-be 🙂