So if you are incredibly good at VC, you can make a lot of money. More on the math here. If you own 20% of a Decacorn ($10B), then the fund makes $2 Billion, and the partners typically keep 20% of that, or $400m. And split it up. The math isn’t quite that simple (at all), but it’s close enough to that simple.
So you really can make hundreds of milllions in venture (and a rare few, even more), if you truly are S-tier and run the place.
And the folks that run the mega-funds, the multi-billion funds, take home multi-million dollar salaries on top of a huge percent of any of those gains.
But that’s probably not what the VC that just invested in you makes. That up-and-comer that bet on you. Here’s what they do make, per a recent survey of 600+ VCs from Venture5 Media per our SaaStr Fund counsel and friend Chris Harvey:
So the VP on your board? They may make $250k a year. That partner that doesn’t run the place? That’s isn’t really a managing partner at a mega-fund? They might make $300k-$400k a year.
Real money.
But maybe not quite as much as you might think. Now that’s cash comp. But that’s not all of it.
“Carry” in the column on the left is how much of the gains on the investments per fund they keep. And it often vests over as long as 10 (!) years.
So that “Partner” that invested in you might have 4%-7% carry or less if they don’t run the place.
So imagine 4% carry … and after 10 years, you sell for $400m:
- The fund owns 10%, so keeps $40m. (actually less, because it’s net of amount invested)
- The partners keep 20% of that, or $8m.
- 4% of $8m is … $320,000 to that “partner” on your board. After 10 years.
Yup. That “partner” on your board might personally make $320,000 if you sell for $400,000,000 after 10 years. If — they are still there.
More here:
