Private Equity Compensation 2007

Executive Summary

The Private Equity and Venture Capital industries continue to show impressive growth. Looking at the venture capital industry, investment in the United States, Europe, Israel, China and India totaled US $35.2 billion in 2006. From a private equity perspective, according to Private Equity research, global fund raising will reach US $450 – 500 billion in 2007, up from US $404 billion in 2006. These industries are performing well and we are seeing the highest level of investment in years. With all this investment movement, employment activity in private equity and venture capital is reaching new heights.

Private Equity Jobs Digest conducted a survey of professionals who were involved with venture capital or private equity investment firms. There were nearly 400 respondents from various parts of the world. 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. The survey also aims to understand how these professionals perceive their work and what they expect from their employers.

Here we summarize the results of the survey to include some of the earnings data and much more. Some notable findings include:

• The annual average private equity and VC compensation is $224,000 with an average 3.5 weeks of vacation benefit.
• Nearly ½ of respondents bring at least 10 years of work experience to the table and only 5 years of private equity or venture capital experience.
• Despite solid compensation packages and an optimistic view of future pay increases, there is overwhelming dissatisfaction among most of these professionals.
• Although common in the industry, an MBA doesn’t guarantee better compensation.
• The difference between the US and UK private equity jobs in terms of compensation and overall work and personal life balance is negligible.
• More than 54% of the respondents are entitled to 4 weeks or more of vacation time.

This information should help job seekers better manage their career and fund managers to differentiate the benefits of working for their particular firm.