The 2008 Job Search Digest compensation survey found that MBAs in private equity and venture capital jobs were earning $16,000 more than non-MBAs. Many open positions still request an MBA and the survey found that over 70 percent of Partners in firms had an MBA.
On the venture capital side, average total compensation in 2008 was $255,000, up 14 percent over 2007. However, research for venture capital jobs in the San Francisco area, a venture capital hotbed, shows a marked drop-off last year, reaching a low point in April, 2008.
Moving forward, when we compare private equity and venture capital compensation we may see a divergence of fortunes. When including carry, buyout professionals took home more than their venture capital peers, due to a market that favored more mature companies over start-ups. The longer-term nature of private equity investments may also give some PE firms more of a cushion to ride out the current downturn, and allow them to hold PE compensation steadier than for venture capital.
We expect to see a drop in venture capital compensation when the 2009 figures come in, due to a number of factors. The economic downturn, a scarcity of IPOs and exit strategies, along with a lack of new funding, has forced many VC firms to perform a triage with their existing investments and concentrate only on the most viable. There is also a surplus of experienced financial professionals from investment banks now looking for jobs, which will continue to exert downward pressure on salaries and compensation.
References:
Job Search Digest
Comments on this entry are closed.