You are invited to participate in Job Search Digest’s annual Private Equity and Venture Capital Compensation Survey, which we are conducting to provide information to evaluate compensation, negotiate better job offers, and benchmark firm compensation practices.
Last year hundreds of respondents from around the world completed the survey. We had participation from firms both large and small such as: Credit Suisse, Labrador Ventures, Intel Capital, Mayfield, New Enterprise Associates, and SoftBank Capital. The survey addresses issues such as the compensation earned by professionals and their work satisfaction.
A Few of Last Year’s Findings:
- Many respondents said they were concerned about their firm’s ability to raise the next fund. An anemic IPO market makes it harder to present investors with a clear path to a successful exit.
- It turns out that size does matter. Funds in the mid range raised the bar when it comes to private equity compensation.
- Working hard does pay off. An interesting finding in looking at private equity work and personal life balance is that there is a direct correlation between hours worked and total compensation earned.
Follow this link to participate in the annual Private Equity and Venture Capital survey.
Many private equity firms grew too large and were overpaid at the peak of the economic boom, and that’s going to lead to structural changes in the industry. So says private equity manager Guy Hands in a recent interview with the New York Times.
Hands is well known for his own unfortunate $4.73 billion purchase of record company EMI in March of 2007, a move that will likely cost his investors and his PE firm, Terra Firma, millions, if not billions in losses. Now he is desperately trying to keep the business afloat while delivering vast interest payments to the banks that financed the transaction, most notably, Citigroup.
Hands comments that many funds grew so large during the peak that their 2 percent management fee became just as important as the 20 percent cut of performance. Success had less to do with performance than simply bulking up on assets. And managers did not use the excess fees to invest in resources and grow the skill base of their funds.
Now he sees the industry beginning to contract, as firms struggle to raise enough new money (and corresponding fees) to support the hundreds of people they already employ. It is similar to what happened in the venture capital industry in the late 1990s, when investors realized too much money was chasing too few deals.
Even professionals who are used to negotiating multi-million dollar deals for private companies or start-up funding for new ventures find it stressful when it comes to putting a value on their own skills and experience, and negotiating for more.
Nevertheless, there are certain principles that industry experts and recruiters agree on, when it comes to negotiating compensation at a new firm. The first is that any mention of compensation should be pushed to the very end of the discussion, and only after a firm job offer is made.
You should politely and firmly deflect any questions about what sort of compensation you’re looking for until it is clear your skills match what the firm is looking for. If either side mentions a specific figure or range, it automatically creates a marker that is difficult to move away from. For instance, if you mention too high a range, it could end the discussions before you’ve even had a chance to demonstrate the full value of your skills and experience. If you mention a figure that’s too low, it opens the door for a low-ball offer or creates the impression that you do not value your skills highly enough.
Before the process even begins, you need to thoroughly research compensation ranges for similar positions. Use online sources such as Job Search Digest’s annual Private Equity Jobs Compensation Report. Or scan the hundreds of jobs listed at Job Search Digest for similar positions. Later on, you will need to link this information with your unique skills and abilities in order to justify asking for more.
Think beyond dollars and build your total compensation package. Put together a list of the perks and bonuses you might want to include, such as signing bonus, health and dental insurance, paid vacations, paid sick leave, retirement or 401k plans, tuition reimbursement, even things like flextime or remote work options. Entry-level positions at private equity or venture capital firms may be more limited in the salary ranges they offer, but may be able to offer a fair amount of flexibility in terms of other forms of compensation.
Next time we’ll talk about what to do if you receive a firm offer with the salary and compensation spelled out.
