The VC Career Path (2024)

FAQs

How hard is it to get a job at a VC? ›

Jobs in Venture Capital are notoriously hard to land. They don't come by often, and they are seldom advertised—except in large VC firms, mainly for entry-level positions. Aspiring VCs often don't understand Venture Capital well enough to apply at the right type of firm, or one that is interested in their skillset.

A career in venture capital can be highly rewarding but also challenging. There are several roles within the venture capital industry, including investment analyst, associate, principal, and partner. Here's a look at what it takes to succeed at each level: Investment Analyst.

The Analyst position is more of a “training” role, and most Analysts leave within a few years to join a portfolio company, complete an MBA, or move to a different firm as an Associate. Some Analysts do get promoted internally to the Associate level, but it's less common than the equivalent investment banking promotion.

According to the survey, VC Associates are 28 years old on average; they have 5 years of total work experience and 3 years of investment experience.

Venture capitalists make money from the carried interest of their investments, as well as management fees. Most VC firms collect about 20% of the profits from the private equity fund, while the rest goes to their limited partners. General partners may also collect an additional 2% fee.

Understand that jobs in venture capital are stressful, competitive, rare, and aren't for everyone. So, before you begin your career pivot, you need to know the roles and responsibilities that await you in the world of venture capital.

Many venture capitalists will stick with investing in companies that operate in industries with which they are familiar. Their decisions will be based on deep-dive research. In order to activate this process and really make an impact, you will need between $1 million and $5 million.

Venture capital funds invest in early-stage and emerging startups. Working in venture capital demands a strong understanding of numbers while also being able to identify potentially successful and impactful startups. In this sense, it's a great career choice for MBA students.

Differences Between Consulting and VC

In consulting, you work with large, established, slow-moving organizations. However, in VC, someone might have a new idea today, and a product and customer tomorrow. There is a rapid change you have to keep up with.

Is it hard to get a VC internship? ›

This is coupled with the fact that many funds don't have formal internship programs. So if you don't have the right connections, it can be tough to get your foot in the door. Tough, but not impossible. In a previous post, we shared some insights on how to break into VC and get a job as a VC associate.

It is possible to find a venture capital position right after graduating from college; however, this is rare. In most cases, you will have to gain relevant work experience and beef up your resume before a venture capital firm will take notice. One way to gain relevant work experience is through internships.

As of May 2, 2023, the average annual pay for an Analyst Venture Capital in New York City is $97,971 a year. Just in case you need a simple salary calculator, that works out to be approximately $47.10 an hour. This is the equivalent of $1,884/week or $8,164/month.

Compensation levels vary by firm size, carried interest, and title, so I'm going to estimate a very wide range of $500K – $2 million USD. In practical terms, this range means: Base salaries are probably in the low 6-figure-range at many firms ($200-$400K), at least for the GPs (Junior Partners may be lower).

The national average salary for a Venture Capital Analyst is $74,027 in United States. Filter by location to see Venture Capital Analyst salaries in your area. Salary estimates are based on 63 salaries submitted anonymously to Glassdoor by Venture Capital Analyst employees. How accurate does US$74,027 look to you?

Data gathered by the Venture Capital Trust Association showed the average age of the current VCT investor is 56, down from 67 in 2017.

25-30% of VC-backed startups still fail

As a general rule of thumb for startups, out of every 10, about three or four fail completely.

The average venture capital firm receives more than 1,000 proposals per year. Approximately 30% of startups with venture backing end up failing. Around 75% of all fintech startups crash within two decades. Startups in the technology industry have the highest failure rate in the United States.

Based on detailed research from Cambridge Associates, the top quartile of VC funds have an average annual return ranging from 15% to 27% over the past 10 years, compared to an average of 9.9% S&P 500 return per year for each of those ten years (See the table on Page 13 of the report).

In general, you'll earn significantly more across all three in private equity – though it also depends on the fund size. For example, in the U.S., first-year Associates in private equity might earn between $200K and $300K total. But VC firms might pay 30-50% less at that level (based on various compensation surveys).

What is the best degree to get into venture capital? ›

Degree: Most venture capitalists have at least a Bachelor's Degree in Business Studies, Mathematics, Accounting, Sales, or Finance. Pursuing an MBA or doctoral degree in a related field could help one stand out.

A Quick Guide to Startup Funding. Raising money from a Venture Capital (VC) firm is extremely challenging. The odds of receiving an equity check from Andreessen Horowitz is just 0.7% (see below), and the chances of your startup being successful after that are only 8%.

It's a big risk, but it can help your startup grow rapidly and become a global success. There are two main risks when it comes to taking on venture capital: 1) The risk of not getting the investment; and 2) The risk of not being able to pay back the investment.

How much does a Venture Capital CEO make? As of May 3, 2023, the average annual pay for a Venture Capital CEO in the United States is $96,050 a year. Just in case you need a simple salary calculator, that works out to be approximately $46.18 an hour.

If you're looking for specific expertise: Solo capitalists offer niche expertise and a more personalized approach to portfolio management because each deal is vetted by them personally. However, this niche expertise may be limiting and too narrow if you're looking to expand industries in the long term.

Generally speaking, those who work in private equity earn more than venture capitalists. This is because the fund sizes are much larger in private equity. There are three components to compensation, whether you are working for a private equity firm or a venture capital company.

McKinsey & Company has been voted number one in "The Best Consulting Firms: Prestige" list of the Vault.com career intelligence website consecutively for 14 years since 2002. The firm currently serves two-thirds of the Fortune 1000. Their areas of expertise include management, organization, operations and IT.

Advisory giant Accenture consistently pays consultants the highest starting salary compared to the big four consulting firms, with PwC and Deloitte vying for second place at different experience levels.

Compensation: $15/hr.

What percentage of interns get hired? ›

70% of all interns are offered a position at the same company they interned for, and only 20% decline that offer. Approximately 70% of interns across the nation are given a job offer at the same company they interned with after completing their training period.

The hours worked vary by firm type and size, but the average is around 50-60 hours per week. That means that you'll be in the office or meetings most of the day on weekdays, with relatively free weekends.

VC (venture capital) interns get paid around $3,000 to $5,000 a month. However, if a person is in an MBA program at an Ivy League business school, they can earn close to $75,000 during their venture capital internship.

How many people are employed in the Venture Capital & Principal Trading industry in the US in 2023? There are 78,962 people employed in the Venture Capital & Principal Trading industry in the US as of 2023.

The average Financial Analyst III salary in New York, NY is $112,046 as of March 28, 2023, but the range typically falls between $102,281 and $123,405.

Carry is calculated as a percentage—typically between 20% and 30%*—of the return on investment after limited partners have been paid out 1X their investment.

Making partner requires more than a decade on average at funds of funds (12 years), mezzanine firms (12.7 years), institutional investors (12.8 years) and corporate VC firms/secondary funds/co-investment funds (13 years).

What is the starting salary of CFA Level 1 in US? ›

CFA Level 1 Salary. $31,500 is the 25th percentile. Salaries below this are outliers. $52,000 is the 75th percentile.

The Odds of Succeeding for a Startup Funded by a Top VC

Since there are 4,000 companies looking for funding, that translates to odds of 5.0%.

VCs prefer to recruit presentable, highly articulate professionals with a passion for startups over number crunchers with limited interest in startups. This is especially the case at early-stage firms, which focus on sourcing, building networks, and setting up meetings to win deals and raise capital.

The average venture capital firm receives more than 1,000 proposals per year. Approximately 30% of startups with venture backing end up failing. Around 75% of all fintech startups crash within two decades. Startups in the technology industry have the highest failure rate in the United States.

According to research by Industry Ventures on historical venture returns, GPs should target an IRR of at least 30% when investing at the seed stage. Industry Ventures suggests targeting an IRR of 20% for later stages, given that those investments are generally less risky.

Venture Capital Associate Salary and Bonus Levels

At the large VC firms, Pre-MBA Associates earn $150K to $200K USD in base salary + bonus, while Post-MBA Senior Associates might earn closer to $200K to $250K. If you're at a smaller/newer firm or outside major financial centers, expect lower compensation.

It is possible to get into Venture capital without an MBA if you have relevant experience in business development, product management, or banking, among other areas. However, earning an MBA degree from a top institute can open up good opportunities in the field, even if you come from a non-traditional background.

First, they get a commission on gains they produce for the fund, which is usually 20 percent and is called “carried interest.” Second, VCs receive a set fee, to run the business, while they and their investors await a future good payday from investment gains.