How can you compare working as a venture partner to an associate?

The venture partner role has expanded in scope to extend beyond sourcing and managing investments to include other roles and contributions such as identifying prospective limited partners for the fund, supporting the partners in the development and execution of fund strategy and various operational activities. Each of these roles comes with different expectations regarding the amount of time devoted to the work and compensation.

Venture Partners and Associates are both roles within a venture capital (VC) firm, but they typically differ in their responsibilities, tenure, decision-making authority, compensation, and the paths that lead individuals to these roles. A Venture Partner is typically a more senior and strategic role than an Associate. They often come on board with a specific expertise or network that the firm values. They may or may not be full-time employees and might have other commitments outside the firm. An Associate is an entry to mid-level role in a VC firm. Associates usually work full-time and are involved in the day-to-day operations of the firm.

Venture Partners might have a different compensation structure, possibly getting a share of carried interest or specific deal-based compensation. Their compensation might be more variable than that of full-time employees. Associates typically receives a base salary with a bonus component. They may also get a small share of the carried interest, especially in more senior associate roles.

The share of carried interest offered to a venture partner will vary depending on the role that he or she is playing and expectations regarding the amount of time the venture partner will devote to the fund. Carried interest may apply to the entire portfolio of the fund or be limited to deals that the venture partner has originated for the fund.

While all of the characteristics mentioned in the article are important for a venture partner to contribute to the fund, a number of emerging fund managers are bringing on venture partners with limited experience in the industry but specific know-how and contacts in areas where the partners are less comfortable. A small group of venture partners working exclusively for a share of the carried interest can be an effective short-term substitute for permanent staff, a luxury that few emerging fund managers can have due to the small amount of management fees available to scale the fund.

Analyst: Stanford MBA with no discernible work experience or domain expertise Partner: Same as analyst but without the MBA. Got a successful exit and is now using it to milk LPs for all they're worth.

In essence, while both roles contribute to the success of a VC firm, the Venture Partner is more strategic, bringing specific expertise and connections to the table. In contrast, the Associate role is more operational, focused on sourcing and evaluating potential investments.

Partner is a more strategic role, Associate is a more operational role, even though for partnership experience counts more; for associate, education counts more