For employers, openly sharing compensation structures and pay ranges is increasingly essential for attracting and retaining top talent. For employees, access to accurate compensation data is invaluable, particularly when negotiating salaries, whether for a new role or an existing position.
However, implementing pay transparency can be a challenge in certain regions and industries.
One notable example is Africa’s venture capital (VC) space. With fewer players and a less developed ecosystem compared to markets like Europe, North America, and Asia, it can be difficult to gauge what compensation to expect when entering the field.
A recent report by Dream VC and A&A Collective aimed to shed light on compensation structures across junior venture capital roles.
As Mark Kleyner, Co-founder and Co-CEO of Dream VC, highlighted during a call with Techpoint Africa, “You can’t really talk about building a more robust labour market if there is inconsistent data on venture capital (VC) salaries.”
By shining a light on pay packages across the industry, Kleyner hopes to encourage more individuals to consider venture capital as a viable career path while also showcasing to foreign firms what is attainable in the region.
Over three months, the report gathered data from 209 participants across 28 countries, providing valuable insights into compensation in the venture capital space.
The majority of survey participants (more than 70%) were between the ages of 25 and 34, which reflects the study’s focus on pre-partner compensation and highlights the youth-driven nature of Africa’s VC space.
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In terms of gender distribution, the survey revealed a 56.94% male and 43% female split, reflecting a more balanced gender representation in venture capital than might be expected in other industries.
Of the ten nationalities represented, Kenya, Nigeria, and Ghana were the most prominent. This aligns with the concentration of venture capital activity in these countries, as many VC firms are establishing themselves in Kenya and Nigeria due to their more developed startup ecosystems. South Africa, Rwanda, and Uganda also featured prominently.
Across all levels of representation, the report found that venture capital professionals earn more outside Africa on average. Analysts in Africa earn $21,000 compared to their counterparts abroad, who make $28,000. Similarly, Associates in Africa earn $26,000, whereas those outside the continent earn $38,000.
While local currencies were commonly reported, the US dollar was the most frequently used currency for salaries on the continent. This prevalence of the dollar can likely be attributed to the presence of foreign VC firms and a desire to shield local employees from currency volatility.
Carry — the share of a fund’s profit paid to employees — was largely absent for most individuals.
Kleyner attributes this to the small size of many African VC funds, which forces general partners to allocate a larger share of carry to themselves in lieu of higher salaries. Despite this, he notes that the average carry in smaller African firms is higher than the global average, suggesting that these firms may use carry as an incentive to attract talent.
Most participants reported receiving additional perks from their employers, such as health/dental insurance, paid vacation time, and pension contributions. Other benefits included financial support for professional training, remote work compensation, co-working space memberships, and office meals.
At least half of the survey participants held a bachelor’s degree, while 43.54% had either an MBA or a Master’s degree. Only 39.23% had any form of international education.
“Firms may benefit from the diverse perspectives brought by professionals with international education, while those without it highlight the availability of locally trained talent that understands the regional context,” the report notes.
Noting that compensation in venture capital is often determined by fund size, Kleyner points out that the recent trend of larger fund raises on the continent is promising for employees.
“As more institutional funding comes into African markets, that means larger funds can be set up. Larger funds have larger management fees, and they can then pay higher salaries. Secondly, as there is more international understanding of the continent, more international funds will come and compete, which will put upward pressure on salaries,” Kleyner adds
