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September 14, 2006

Average Comp at VC Firms: $770,000

posted by MR WAVETHEORY at 9/14/2006 12:41:00 AM
The WSJ reports that on average employees at venture capital firms made $770,000. Partners on average earned $1.5 million.
Pay for venture capitalists is up 35% this year, with senior partners at venture firms earning nearly $1.5 million a year and managing general partners raking in almost $2 million. The average employee -- comprising lower-level analysts, associates and even office managers as well as the top earners -- is expected to haul in $777,000 this year in salary, bonus for 2005 and investment profits, according to a new study from Holt Private Equity Consultants and Dow Jones Private Equity Analyst, a trade publication. (Dow Jones Private Equity Analyst is owned by Dow Jones & Co., publisher of The Wall Street Journal.)
On how they do it...
"The hidden secret in venture capital is, as you raise larger funds ... and you keep the core team relatively the same, the compensation [per partner] goes up," says Woodside Fund's Mr. Occhipinti. "If you're raising funds every three years, then you're getting fees on top of fees," all of which can enrich the fund's partners. Management fees also pay for rent, travel and other overhead expenses. Mr. Occhipinti says his firm has kept its funds small lately in order to try to align its partners' interests with those of investors. A recent Woodside fund raised in 2003 was just $150 million.

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