Pay for the VCs in the $260 billion venture industry Up 35% this year

The average investment return for U.S. venture-capital firms was 13.8% for the 12 months ended March 31, just beating the 11.7% return on the Standard & Poor's 500-stock index, according to research firm Cambridge Associates says. Larger private-equity and buyout firms, by contrast, posted much higher average returns, of 31.7%.

However the pay for the venture capitalists in the $260 billion venture industry increased 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 is expected to haul in $777,000 (only partners and above make any where close to the average) 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. (Venture Firms Are Doling Out Large Pay Deals - WSJ)

More Revealing VC Stats:
  • The most successful hedge-fund managers can earn tens of millions of dollars a year.
  • The survey found that the average employee at buyout firms is expected to earn $1.2 million in take-home pay this year, up 61.5% from last year.
  • The total dollar value of acquisitions of venture-backed companies declined in 2005 to about $14.4 billion, from $15.4 billion a year earlier, according to the National Venture Capital Association and Thomson Financial.
  • Just 56 VC-backed IPO deals valued at nearly $4.5 billion completed last year, down from 93 deals valued at $11 billion in 2004.
  • Thomson and the National Venture Capital Association say the average U.S. venture fund was $164.6 million last year, the most ever, and nearly 28% more than in 2000. Some venture firms are aising new funds worth $1 billion or even more than $2 billion.

Venture capitalists usually earns a "carry" of 20% on a fund's gains -- while the management fees are typically 2% to 2.5%. of a fund's assets.

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