How VC compensation actually works

Hi! I’m glad you’re here. You’ve made it to issue #65 of VC Demystified🪄.

My name’s Nicole - I’m a Principal at an early stage venture fund, and I know firsthand that VC can often be a black box. Breaking into the industry may feel daunting and resources can seem scarce and inaccessible. I wanted to put together a newsletter to give others the playbook I wish I had when I first started.

One of the easiest ways to break into VC that no one talks about is through angel investing. Learn the game first, break in second. If you want to learn more about angel investing from experts, Hustle Fund Angel Squad gives me a set amount of free Guest Passes to join their community every quarter. Sign up here. Feel free to share with a friend!

Today’s deep dive: A simple overview of how VC firms are structured and how they pay their employees

^{My personal mission is to open as many doors as possible for other people and this newsletter is just one avenue to do that. As always, I will continue to post VC insights daily for free across my socials.}

Read time: 5 minutes

A simple overview of how VC firms are structured and how they pay their employees

VC compensation is one of the least understood parts of the industry. It’s opaque, varies widely by firm, and often surprises people transitioning from banking or consulting.

If you want to work in venture, it’s critical to understand how you get paid, what’s market, and why compensation often looks different than other finance roles.

Here’s a clear breakdown:

1. The Basics: Salary and Bonus

Most VC firms pay a base salary + annual bonus structure.

Here is an overview of compensation for each position based on fund size:

Unlike banking, you won’t see $300K-$400K+ total comp at the junior levels, especially for small and micro funds. VC salaries are comfortable, but they aren’t designed to make you wealthy quickly. That’s where carry comes in.

2. Carry: The Real Wealth Builder

Carry (short for “carried interest”) is a share of the fund’s profits that goes to the investing team.

Here’s how it works:

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