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Can Junior VCs Count on $120,000 Bonuses This Year? Hmm…
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By Yuliya Chernova, WSJ Pro
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Good day. Compensation has been on the rise at venture firms, including for those with roles below the rank of partner. But given the bruising the market has taken this year, their pay might be about to contract.
Principals and vice presidents, the highest-paid pre-partner level VCs, at growth and late-stage firms earned a median of $407,000 in total compensation, including salary and bonuses, in 2022, according to data collected by the Emerging Venture Capitalists Association, a nonprofit organization for investors at the earlier stages of their careers. That’s up from $395,000 in 2021, which was itself a leap from $341,000 in 2020, the EVCA said. The survey was drawn from 337 respondents who are full-time investors and association members.
At the leanest rung of the business—that of analysts at the smallest venture firms focused on pre-seed and seed deals—total compensation didn’t move much. It edged higher to $96,000 in 2022, from $95,000 in 2021 and $85,000 in 2020, according to the data.
The bonus part of the equation was rewarding for some in 2022, more than doubling year-over-year to $11,000 for analysts at pre-seed firms, for example, and climbing to $120,000 from $98,000 the previous year for senior associates at growth firms, according to the data.
But those advances—modest or dramatic—might not be repeated this year.
“Total VC compensation has historically been sensitive to macroeconomic and market conditions,” said Marcelo Ballvé, head of research and co-founder at Terra Nova, a venture and research firm that conducts data analysis for EVCA.
Exits have dried up, which will have a direct impact on the portion of VC payouts derived from profits generated by portfolio-company listings and acquisitions. Investors who get such distributions will see less in their pockets this year, Mr. Ballvé said.
Bonuses, too, could suffer from the tougher market.
“From what we heard, we think many firms will end up bringing down salary bonuses to reflect tightening market conditions,” Mr. Ballvé said.
And now on to the news...
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The bankruptcy filing came less than a year after Starry went public in March 2022. PHOTO: SACHELLE BABBAR/ZUMA PRESS
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Bankruptcy filing. Broadband internet startup Starry Group Holdings Inc. filed for bankruptcy less than a year after going public by merging with a special-purpose acquisition company, or SPAC, WSJ Pro reports. The discount internet service provider said in papers filed with the U.S. Bankruptcy Court in Wilmington, Del., that a liquidity crunch, mounting debts and the high costs of supporting existing infrastructure made it necessary to resort to chapter 11 to restructure the business.
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The bankruptcy filing came less than a year after Starry went public in March 2022 by completing its merger with FirstMark Horizon Acquisition Corp., a SPAC backed by the founders and executives of technology-focused venture-capital firm FirstMark Capital. FirstMark didn’t immediately respond to a request for comment.
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SPACs were popular investments on Wall Street in 2021, booming alongside cryptocurrencies, meme stocks and other risky assets.
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-40%
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Blockchain-analytics firm Chainalysis Inc. says payments it tracked to ransomware groups dropped by 40% last year, totaling $457 million. That is $309 million less than 2021’s tally.
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Circle Focuses on Growth After Canceled SPAC Merger
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Circle Internet Financial Ltd. wants to increase its workforce by as much as 25% this year, finance chief Jeremy Fox-Geen said, as the cryptocurrency operator pushes ahead with an expansion despite its recently canceled deal to go public and industrywide layoffs, WSJ’s CFO Journal reports. The company, which operates the USD Coin stablecoin, or USDC, had about 900 employees at the end of last year and in 2023 it expects an increase of 15% to 25%, or an additional 135 to 225 workers, he said. That’s a lower growth rate than it had in 2022, when head count roughly doubled from 2021. Circle last year raised $400 million in a funding round from a group including asset managers BlackRock Inc.
and Fidelity Investments Inc., bringing its total funding to $1.1 billion.
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Amazon Purchase of One Medical Clinics Won’t Be Blocked by FTC
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Amazon.com Inc. will be able to close its purchase of 1Life Healthcare Inc., the operator of the One Medical line of primary-care clinics, without a legal challenge by antitrust enforcers, The Wall Street Journal reports. The Federal Trade Commission won’t sue in time to block the $3.9 billion deal, including debt, but will continue its investigation of the merger, an agency spokesman said. The decision clears a path for Amazon to substantially expand its healthcare offerings and operate physical medical clinics. Amazon has invested in the healthcare space for years, including with an online pharmacy and other health ventures.
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Corrections & Amplifications: The F-Prime Fintech Index was down 72% in 2022. The intro in the Feb. 15 newsletter incorrectly said the index was down 78% last year.
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Funds
Link Ventures, an investor in early-stage technology startups leveraging data science and artificial intelligence, launched its third fund with roughly $150 million in commitments, which is 50% larger than its vintage 2019 fund. The Cambridge, Mass.-based firm said the new fund made its initial investment in payment protection startup nsKnox.
South African chemicals and energy company Sasol has partnered with Emerald Technology Ventures to form Sasol Ventures. The fund will invest €50 million over the next five years in sustainable technologies related to Sasol’s business.
People
500 Global named Saemin Ahn, Martin Cu and Shahril Ibrahim as partners on the firm’s Southeast Asian team. Mr. Ahn was previously founding managing partner at Rakuten Ventures, Mr. Cu was at Ninja Van and Mr. Ibrahim was with Khazanah Americas.
Cybersecurity startup Red Sift appointed Ian Howells as chief business officer. He was previously chief marketing officer at Intacct. Red Sift is backed by investors including Highland Europe, Sands Capital, MMC Ventures and Oxford Capital Partners.
Exits
Space habitation technology company Vast acquired Launcher, which develops rocket engines and transfer vehicles to deliver small satellites to orbit, for an undisclosed amount. Hawthorne, Calif.-based Launcher is listed in the portfolios of K-Street Capital, Boost VC, High Water Venture Partners and Fine Day Ventures.
Home inspection providers InspectionGo, Repair Pricer and HomeBinder are combining in an all stock merger. Repair Pricer is listed in the portfolio of Wasatch Equity Partners. HomeBinder is backed by SixThirty Ventures.
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EO Charging, a U.K.-based provider of electric vehicle charging technology for commercial fleets and individuals, picked up an $80 million investment from Vortex Energy and Zouk Capital.
Quantum Motion, a U.K.-based quantum computing startup, scored more than £42 million (about $51 million) in funding. Bosch Ventures led the round, which included contributions from Porsche SE, British Patient Capital, Oxford Science Enterprises, Inkef, Parkwalk Advisors, Octopus Ventures and IP Group.
Finch Inc., a San Francisco-based employment API startup, raised $40 million in Series B funding. General Catalyst and Menlo Ventures led the round, which included participation from QED Investors, Altman Capital and PruVen Capital. Alex Tran, managing director at General Catalyst, will join the company’s board.
Buk, a Chilean human resources platform, snagged $35 million in funding led by Base10 Partners.
Chaos Labs Inc., a New York- and Tel Aviv-based crypto security provider, was seeded with a $20 million investment. Led by Galaxy and PayPal Ventures, the round included additional support from Coinbase, Uniswap, Lightspeed Venture Partners, Bessemer Venture Partners and others.
Metomic, a London-based data security startup, landed $20 million in Series A financing. Evolution Equity Partners led the investment, which saw participation from Resonance and Connect Ventures.
Entitle, a cloud permissions management platform with offices in New York and Tel Aviv, emerged from stealth with $15 million in seed funding led by Glilot Capital Partners.
AeroCloud, a U.K.-based airport management platform that uses artificial intelligence and machine learning, nabbed $12.6 million in Series A funding. Lead investor Stage 2 Capital was joined by I2BF Global Ventures, Triple Point Ventures, Praetura Ventures, Playfair Capital and Haatch in the round.
Sending Labs, which is building a Web3 communications stack, was seeded with a $12.5 million investment. Insignia Venture Partners, MindWorks Capital and Signum Capital led the round, which included participation from K3 Ventures, UpHonest Capital and others.
Sublime Security Inc., a Washington, D.C.-headquartered email security platform, grabbed a $9.8 million investment. Led by Decibel, the round included support from Slow Ventures and others.
Prismatic Software Inc., a Sioux Falls, S.D.-based integration platform for business-to-business software companies, secured $9 million in Series A financing led by Five Elms Capital.
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Jordan Johnson says he favors bitcoin as an investment because it seems more viable than other routes to significant wealth. PHOTO: ADAM RIDING FOR THE WALL STREET JOURNAL
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