The venture capital industry delivered robust results in 2020, contrary to dark expectations during the pandemic’s chaotic early phase.
With VC firms turning out to be as busy as ever, many paid out bonuses in addition to keeping pay packages steady and increasing salaries in an otherwise tumultuous year—an indication of the stiff competition for retaining talent.
Indeed, new data shows that there was little to no change in the median bonus figures paid to associates and analysts at venture capital and private equity firms in 2020, according to the J.Thelander-PitchBook survey of more than 630 firms.
Jody Thelander, founder and CEO of the namesake consulting firm, said that venture firm positions continue to be in high demand and recruiting is as competitive as ever.
The survey shows that 67% of firms said bonuses will remain the same and nearly 30% expect the payments to increase between 2021 and 2022.
Depending on the compensation structure and philosophy of the firm, an average of 25% to 75% of base pay was paid out for bonuses. The higher end of the range represents more senior investment professionals, with the lower end representing associates and senior associates.
The survey also shows that around 75% of pre-MBA analysts were able to get their hands on a bonus check in 2020—a sharp contrast to the low proportion of directors and managers who took home those awards.
The highest-ranking personnel at investment firms often don’t get bonuses because, in addition to base pay, their compensation depends heavily on carried interest—a long-term incentive for senior team members.