Do I need to take a pay cut to break into venture capital?

Question

I currently work in investment banking, and while I want to transition into VC, I’m concerned about the pay difference. Some people say that entry-level VC roles don’t pay nearly as well as banking or private equity. Is that true, and if so, is the long-term career upside worth the initial financial hit?

Answer 1

Hey hey,

In most cases, yes, moving from IB to VC often comes with a pay cut, especially at the junior level. Base salaries and bonuses in VC typically don’t match what you’d earn in banking or PE, at least initially. However, compensation structures in VC can vary widely depending on the firm, location, and whether a share of investment profits is part of the package.

Best,
Rita

Answer 2

Yes, it’s common to take a pay cut when moving from investment banking to venture capital, especially at entry level. VC salaries and bonuses usually start lower than banking or PE.

That said, the long-term upside in VC can be big if you succeed—there’s potential for carry (profit sharing), faster career growth, and more varied work.

Whether it’s worth it depends on your priorities: if you’re passionate about startups and investing, and okay with a short-term financial hit, it can pay off. If immediate compensation is your top priority, it might be tougher.