What is a Venture Partner in a VC firm?


What is a Venture Partner in a VC firm?

Venture partners in VC firms are not the same as general partners or managing directors. Most startups always question what is a venture partner and what do they do? A venture partner is essentially someone that the Venture Capital firm brings in to help manage their venture investments.

Another thing startups tend to be confused about is that they think venture partners are “EIR” (Entrepreneur in residence). Venture partners are not EIRs and VP gets direct access to the business and investment informations. If you want to know what exactly is an entrepreneur in residence refer to this link here: http://entrepreneursky.com/exactly-entrepreneur-residence/  

A lot of venture partners eventually become full time general partners with the firm after several years. Some VPs are retired professionals who still have an interest in doing deals. Sometime, individuals or successful entrepreneurs join VC firms as a venture partner. Other times the firm do not have enough room or funds for a new general partner, so they would give out the temporary position of venture partner for a period of time. This can be thought of as a probationary period. Other VPs come from banking or finance roles, usually revolving around investments and loans.

venture partners

Venture Partner’s compensation varies between firms. Most of the entry level VPs do not receive a salary, instead they receive a carry on every deal they make profit on. Usually the newer partners get around 15%-20% carry, while the more experienced and higher ends carry around 25%.The only problem with this compensation model is that a startup usually do not see an exit route until 5-10 years later. If that is the case, you could be living off nothing for 5 years. Most Venture partners are usually extremely successful entrepreneurs or have been in a high paying position before, so they are well prepared financially wise with reserves.

Other than plain knowledge, why else should a startup know about how Venture Partners work? The reason startups need to know is because deals can change if the partner decides to leave the firm. The way that the deal change will effect your startup heavily, so having connections with other general partners might be a useful decision for startups.


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