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Brilliant post — very informative + clearly written. > What goes unsaid, is that only the actual partners in the fund get any carry, associates just get a comf

Brilliant post — very informative + clearly written. > What goes unsaid, is that only the actual partners in the fund get any carry, associates just get a comfortable salary and the prospects of becoming a partner (at another firm obviously) "(at another firm obviously)" — I've heard this in other discussions about VC careers too. Why is it the case?

harveyesq 7y ago
Because it takes 10 or more years for one fund to run its course. If the associate stays with the VC firm, it's a long uphill road rising to the top. The fastest shortcut is to jump over to another firm that needs that associate's skillsets, and might even be open to issuing a profit's interest (split off of carry).
- refrigerator 7y ago
  How come they need to wait til the whole fund to run its course before bringing on new partners? Don't they raise new funds every few years, before old ones have entirely exited?
  - harveyesq 7y ago
    Yes but the average partner per fund for microVC (under $100M) is less than 2 people (1.94 is the average). So unless you're working for a large VC platform with several funds and plenty of room on the team's cap table, you're waiting patiently on the sidelines of a very long game.
- DrAwdeOccarim 7y ago
  And they can also probably file 83(b) elections claiming the profits interest have zero value to start the LTCG clock and avoid wage tax...
ignoramous 7y ago
> (at another firm obviously) I have no insider knowledge but I guess it might be due to glass ceilings: https://en.wikipedia.org/wiki/Glass_ceiling https://en.wikipedia.org/wiki/Glass_ceiling
- pc86 7y ago
  > I have no insider knowledge Probably best to stop there then, as this has nothing to do with it.
  - ignoramous 7y ago
    To cherrypick quotes from topmost the comment: "It’s hard to escape from the shadow of your mentor and find your own footing." "It’s a harder sell when you are promoting from within..." "A16Z used to have a rule where no one internally would be promoted to be a GP..." From where I come from, the term glass ceiling is not just limited to women but all forms of discrimination at workplace denying someone/anyone a rise up the ranks. In the US, the term seems to be exclusively used in the domain of gender dynamics.
    - pc86 7y ago
      That may be how you use the term, but that's not what the term means. > The metaphor was first coined by feminists in reference to barriers in the careers of high-achieving women.[0] > "A glass ceiling" represents a barrier that prohibits women from advancing toward the top of a hierarchical corporation.[0] [0] https://en.wikipedia.org/wiki/Glass_ceiling https://en.wikipedia.org/wiki/Glass_ceiling
      - ignoramous 7y ago
        Thanks. > That may be how you use the term That's the thing: It's not just me, but the entire country where I work, doesn't limit its usage to gender or minority. > but that's not what the term means. "a situation in which progress, esp promotion, appears to be possible but restrictions or discrimination create a barrier that prevents it." https://www.thefreedictionary.com/glass+ceiling https://www.thefreedictionary.com/glass+ceiling "Invisible but real barrier through which the next stage or level of advancement can be seen, but cannot be reached by a section of qualified and deserving employees. Such barriers exist due to implicit prejudice on the basis of age, ethnicity, political or religious affiliation, and/or sex." http://www.businessdictionary.com/definition/glass-ceiling.html http://www.businessdictionary.com/definition/glass-ceiling.h... "Since becoming commonplace in contemporary language it [glass ceiling] has become generally applied to obstacles encountered in any field and by any group" https://www.phrases.org.uk/meanings/glass-ceiling.html https://www.phrases.org.uk/meanings/glass-ceiling.html "a point after which you cannot go any further, usually in improving your position at work" https://dictionary.cambridge.org/dictionary/english/glass-ceiling https://dictionary.cambridge.org/dictionary/english/glass-ce...
jacquesm 7y ago
I've seen more than one associate at a VC firm become partner. And I don't know that many VCs funds intimately (about 40).
- deleted 7y ago
  [deleted]
vcstarterkit 7y ago
Partners have two jobs at firms: raise money from LPs and convince great founders to take the firm’s money. If you were hiring a partner you would choose to go in this order: poaching a star partner from another firm, hiring a star founder/operator, an all-star associate at a more successful firm, promoting your own associate. Any of the first three options will help sell LPs and founders on your new fund by bringing along some brand name credibility. It’s a harder sell when you are promoting from within, especially as associates do not have experience raising money from LPs. Another reason: Venture firm partnerships are inherently political environments and perception matters. It is akin to why grad students are discouraged from becoming professors at the same school they got their PhD from. It’s hard to escape from the shadow of your mentor and find your own footing. There a few other reasons that promotions are rare, but they do happen. A16Z used to have a rule where no one internally would be promoted to be a GP because they only wanted to have former operators be partners (they have now since changed that policy https://a16z.com/2018/07/17/connie-chan/ https://a16z.com/2018/07/17/connie-chan/)
- Major_Grooves 7y ago
  I remember going to A16Z a few years ago, and everybody was called Partner. Looking at Connie's LinkedIn profile it looks like she too was "Partner" and then promoted to "General Partner". Does that mean the "Partner" title is kinda BS and they only really mean Partner when you are a GP?
  - vcstarterkit 7y ago
    Yes, a16z famously lets everyone call themselves “partner” as a form of title arbitrage https://vcstarterkit.substack.com/p/how-vcs-choose-twitter-bios https://vcstarterkit.substack.com/p/how-vcs-choose-twitter-b...
    - sambroner 7y ago
      Funny article. Surprisingly useful (as someone who is not part of VC Twitter)
    - 7y ago
paulddraper 7y ago
Funds have a long lifetimes, especially if you count follow-on investments from the same LPs. Timing is very important, and it's likely that another VC firm has more opportune timing than the one you are currently at.
jiveturkey 7y ago
Just like becoming principal engineer. You will never do it at a company you joined as merely senior, unless you are approx employee #5 or earlier. it should be obvious why. there's no more room (nor need) at the top. if you wait for it, you are not waiting for your skills to be recognized, you are waiting for someone to die.

harveyesq 7y ago

Because it takes 10 or more years for one fund to run its course. If the associate stays with the VC firm, it's a long uphill road rising to the top. The fastest shortcut is to jump over to another firm that needs that associate's skillsets, and might even be open to issuing a profit's interest (split off of carry).

refrigerator 7y ago
How come they need to wait til the whole fund to run its course before bringing on new partners? Don't they raise new funds every few years, before old ones have entirely exited?
- harveyesq 7y ago
  Yes but the average partner per fund for microVC (under $100M) is less than 2 people (1.94 is the average). So unless you're working for a large VC platform with several funds and plenty of room on the team's cap table, you're waiting patiently on the sidelines of a very long game.
DrAwdeOccarim 7y ago
And they can also probably file 83(b) elections claiming the profits interest have zero value to start the LTCG clock and avoid wage tax...

ignoramous 7y ago

> (at another firm obviously) I have no insider knowledge but I guess it might be due to glass ceilings: https://en.wikipedia.org/wiki/Glass_ceiling https://en.wikipedia.org/wiki/Glass_ceiling

pc86 7y ago
> I have no insider knowledge Probably best to stop there then, as this has nothing to do with it.
- ignoramous 7y ago
  To cherrypick quotes from topmost the comment: "It’s hard to escape from the shadow of your mentor and find your own footing." "It’s a harder sell when you are promoting from within..." "A16Z used to have a rule where no one internally would be promoted to be a GP..." From where I come from, the term glass ceiling is not just limited to women but all forms of discrimination at workplace denying someone/anyone a rise up the ranks. In the US, the term seems to be exclusively used in the domain of gender dynamics.
  - pc86 7y ago
    That may be how you use the term, but that's not what the term means. > The metaphor was first coined by feminists in reference to barriers in the careers of high-achieving women.[0] > "A glass ceiling" represents a barrier that prohibits women from advancing toward the top of a hierarchical corporation.[0] [0] https://en.wikipedia.org/wiki/Glass_ceiling https://en.wikipedia.org/wiki/Glass_ceiling
    - ignoramous 7y ago
      Thanks. > That may be how you use the term That's the thing: It's not just me, but the entire country where I work, doesn't limit its usage to gender or minority. > but that's not what the term means. "a situation in which progress, esp promotion, appears to be possible but restrictions or discrimination create a barrier that prevents it." https://www.thefreedictionary.com/glass+ceiling https://www.thefreedictionary.com/glass+ceiling "Invisible but real barrier through which the next stage or level of advancement can be seen, but cannot be reached by a section of qualified and deserving employees. Such barriers exist due to implicit prejudice on the basis of age, ethnicity, political or religious affiliation, and/or sex." http://www.businessdictionary.com/definition/glass-ceiling.html http://www.businessdictionary.com/definition/glass-ceiling.h... "Since becoming commonplace in contemporary language it [glass ceiling] has become generally applied to obstacles encountered in any field and by any group" https://www.phrases.org.uk/meanings/glass-ceiling.html https://www.phrases.org.uk/meanings/glass-ceiling.html "a point after which you cannot go any further, usually in improving your position at work" https://dictionary.cambridge.org/dictionary/english/glass-ceiling https://dictionary.cambridge.org/dictionary/english/glass-ce...

jacquesm 7y ago

I've seen more than one associate at a VC firm become partner. And I don't know that many VCs funds intimately (about 40).

deleted 7y ago
[deleted]

vcstarterkit 7y ago

Partners have two jobs at firms: raise money from LPs and convince great founders to take the firm’s money. If you were hiring a partner you would choose to go in this order: poaching a star partner from another firm, hiring a star founder/operator, an all-star associate at a more successful firm, promoting your own associate. Any of the first three options will help sell LPs and founders on your new fund by bringing along some brand name credibility. It’s a harder sell when you are promoting from within, especially as associates do not have experience raising money from LPs. Another reason: Venture firm partnerships are inherently political environments and perception matters. It is akin to why grad students are discouraged from becoming professors at the same school they got their PhD from. It’s hard to escape from the shadow of your mentor and find your own footing. There a few other reasons that promotions are rare, but they do happen. A16Z used to have a rule where no one internally would be promoted to be a GP because they only wanted to have former operators be partners (they have now since changed that policy https://a16z.com/2018/07/17/connie-chan/ https://a16z.com/2018/07/17/connie-chan/)

Major_Grooves 7y ago
I remember going to A16Z a few years ago, and everybody was called Partner. Looking at Connie's LinkedIn profile it looks like she too was "Partner" and then promoted to "General Partner". Does that mean the "Partner" title is kinda BS and they only really mean Partner when you are a GP?
- vcstarterkit 7y ago
  Yes, a16z famously lets everyone call themselves “partner” as a form of title arbitrage https://vcstarterkit.substack.com/p/how-vcs-choose-twitter-bios https://vcstarterkit.substack.com/p/how-vcs-choose-twitter-b...
  - sambroner 7y ago
    Funny article. Surprisingly useful (as someone who is not part of VC Twitter)
  - 7y ago

paulddraper 7y ago

Funds have a long lifetimes, especially if you count follow-on investments from the same LPs. Timing is very important, and it's likely that another VC firm has more opportune timing than the one you are currently at.

jiveturkey 7y ago

Just like becoming principal engineer. You will never do it at a company you joined as merely senior, unless you are approx employee #5 or earlier. it should be obvious why. there's no more room (nor need) at the top. if you wait for it, you are not waiting for your skills to be recognized, you are waiting for someone to die.