Venture Capital Pay: Europe vs the US

A partner holding two points of carry at a European seed fund managing a few hundred million euros, and a partner holding two points of carry at Andreessen Horowitz, which manages roughly $90 billion, are holding the same two words on a term sheet: two points. The money underneath those two words is not in the same order of magnitude, and almost none of that gap comes down to either person's judgement.

That is the fact most comparisons of venture pay skip. Salary surveys line up an Associate's base in London against an Associate's base in San Francisco and call it a comparison.

The more useful question is structural: what is the fund actually the size of, how is the cash-to-carry mix weighted, and what happens to that money once tax gets to it. All three answer differently on the two sides of the Atlantic, and all three matter more than the headline number.

Here is how the geographic pay gap in venture actually works, level by level, city by city, and why a US offer is never something you can compare to a European one without doing real work first.

The Same Two Points of Carry, Two Different Universes

Carried interest is conventionally 20% of a fund's profit, split among the people who hold a share of that fund's carry pool. The rate is close to universal. The pool it applies to is not.

None of this means European carry is worthless, or that a smaller fund is a worse place to build a career. It means a quoted carry percentage, on its own, tells you almost nothing about what an offer is actually worth, on either side of the Atlantic.

Where the Gap Starts: Management Fees and Fund Size

Cash pay traces back to the same root as carry: fund size. A management fee, conventionally around 2% of committed capital a year, funds every salary at a firm regardless of how the portfolio performs. A bigger fund produces a bigger fee pool, and a bigger fee pool is what actually lets a firm pay more cash at every level, from analyst to partner.

The European Central Bank has measured the underlying size gap directly, using the same data provider and the same units on both sides of the Atlantic. Between 2020 and 2025, US-domiciled venture funds raised on average about €103 million per fund per year. Funds domiciled in the EU and UK raised about €73 million per fund per year over the same window, roughly 40% less.

EU and UK funds

€73M

US funds

€103M

Same time window, same methodology, from the ECB's own comparison. The size gap starts here, before any single fund's own choices enter the picture.

Zoom out further and the gap widens: total US venture fund size runs to approximately €930 billion, against roughly €150 billion in the EU.

• A €73 million average European fund, at a 2% fee, produces roughly €1.5 million a year to cover the entire firm.
• A €103 million average US fund produces roughly €2.1 million a year for the same purpose, before even accounting for the much larger platforms at the top of the US market that pull the average up further still.
• The largest disclosed European funds, in the €2.5 billion to €2.8 billion range, sit in the same order of magnitude as a single strong US fund vintage, not the tens-of-billions scale that firms like Andreessen Horowitz or Insight Partners now operate at.

None of this is a comment on the quality of European dealmaking. It is simple arithmetic on the base a fixed percentage is applied to, and it is the single largest reason the same job title pays differently depending on which side of the Atlantic it sits on.

Why European Funds Stay Smaller: The LP Base Problem

The fund-size gap above is not a temporary funding cycle. It traces to who actually supplies venture funds with capital in the first place, and the answer looks structurally different on the two sides of the Atlantic.

In the United States, pension funds and university endowments are major contributors to venture fundraising. In Europe, the Banque de France notes their presence "is more limited," and European insurers, the region's largest pool of long-term institutional capital, held just 1.45% of their investments in private equity in the fourth quarter of 2024. European institutional investors, the Banque de France states plainly, "traditionally favour fixed income products" instead.

• Europe's private financial investors, as a group, contribute roughly 17 times less capital to venture than their US counterparts, per the same analysis.
• Public money fills much of the resulting gap rather than closing it: between 2013 and 2023, public entities invested comparable absolute amounts in both regions, around €40 billion each, but that represented 30% of all European investors in venture funds against just 4% in the US.
• A market this reliant on public capital, rather than the deep pension and endowment pools that anchor US fundraising, produces smaller, more numerous funds rather than a small number of very large ones.

Pay by Level in Europe: What the Surveys Show

Europe has no single authoritative compensation survey the way banking has, but a handful of recent, reasonably sized ones agree on the shape of the ladder even where they disagree on precise figures.

The Learning VC and EU.VC benchmark, drawing on 233 respondents across 24 countries, found base salary climbs roughly 73% moving from Associate to Principal, and a further roughly 46% moving from Principal to General Partner. Bonuses at the junior end sit in a narrow band, roughly 13% to 17% of base for analysts and associates. Only a minority of general partners receive a cash bonus at all, since carry is meant to be their primary upside.

A companion survey from the same research pair, with over 400 respondents across 24 countries, adds a country dimension: the UK leads Europe in base salary across most roles, Germany comes second, and Spain lags behind nearly everywhere except general partner pay, where its numbers land close to the European average anyway.

A Germany-specific study, based on 171 respondents and reported by Sifted, sharpens the fund-size point further. Firms managing under €100 million in AUM pay the least, with associates there earning roughly €71,000 on average. Firms above €1 billion AUM pay meaningfully more across every role surveyed. Sector matters too: investment managers at climate-focused funds average roughly €100,000, generalist and deep-tech investment managers clear €130,000, and Web3-focused investment managers can exceed €160,000.

London, Berlin, Paris, Stockholm: The Same Title, Four Different Numbers

Put those findings next to a map and a pattern emerges that has more to do with fund concentration than national wealth.

The pattern across all four cities is the same one the fund-size section already established: a city's average tells you less than any single fund's own disclosed size does. A well-capitalised fund in Berlin can out-pay a thin one in London, and the reverse holds just as easily.

Each City, One at a Time

Each city is still worth taking one at a time, because the reason it lands where it does is different in each case.

• London benefits from depth as much as size: it hosts both large domestic platforms and the European outposts of US crossover funds, whose presence tends to pull local base salaries upward even at firms that are not themselves the largest by AUM.
• Berlin sits inside a national market that pays a real premium over most of continental Europe, but that premium is concentrated in Germany's larger, deep-tech and B2B-focused funds specifically. A small pre-seed fund in Berlin does not automatically share in the German-market premium the way a well-capitalised one does.
• Paris shows up in the European surveys without standing out on base salary in either direction, which makes its carry treatment do more of the work in any real comparison. A French offer with a modest base and genuine, well-structured carry can end up more competitive after tax than the base salary line alone suggests, precisely because France's flat 30% regime, covered in full further down, is comparatively predictable.
• Stockholm is the clearest case of a city where fund concentration, not a citywide compensation culture, sets the ceiling. Two of the region's larger disclosed vehicles are headquartered there, and the fee arithmetic used throughout this article suggests pay at those specific funds should sit well above what a similarly sized market with only small funds could support, even without a dedicated salary survey to confirm it directly.

Pay by Level in the US: What the Surveys Show

US data is more plentiful, though still self-reported rather than firm-disclosed. Venture5's 2026 survey of 509 respondents, reported through the industry newsletter Newcomer, found average analyst salary fell to $78,000 in 2025, a decline of more than 25% from the year before, which Venture5's founder attributed to AI and data tooling compressing demand for entry-level sourcing and research work. Average investment partner salary, by contrast, rose to $317,000 in 2025, up from $296,000 in 2022.

Fund track record matters as much as fund size for this specific role. The same survey found investment partners at firms with five or more funds under management average $512,000 in combined salary and bonus, against $350,000 at firms with fewer than five funds, a gap that tracks a firm's accumulated fee income and fundraising credibility more than any single fund's current size.

A broader, tech-industry-skewed compensation database puts US venture roles at an average total compensation of $138,000 nationally, rising to $212,000 in the Bay Area specifically. That figure sits above Venture5's analyst-specific average and below its reported partner average, which is consistent with a dataset that blends junior and more senior respondents together rather than breaking the ladder out cleanly. Treat it as a general cross-check on the shape of US pay, not as a figure for any one level.

Bay Area vs New York: Same Country, Different Bonus Culture

Even inside the US, the cash-to-bonus mix varies by hub in a way that a single national average obscures. A hub-by-hub compensation guide reports the Bay Area pays the highest median analyst base salary of any US market, while New York pays the highest analyst bonus, enough to push New York's median analyst total cash compensation above the Bay Area's for that specific level.

The pattern flips again one level up. The Bay Area's median associate base salary leads other hubs, but Los Angeles reports the highest associate total cash compensation once bonus is included, driven by a smaller number of well-paying firms in that market rather than a citywide norm.

• A Bay Area offer is more likely to be base-heavy, reflecting the concentration of the largest, longest-established US platforms there.
• A New York offer at the analyst level is more likely to be bonus-heavy, a structural difference worth asking about directly rather than assuming from the headline base figure alone.
• Neither pattern says anything reliable about total compensation at the principal or partner level, where firm track record, described above, matters more than city.

Same Carry Percentage, Wildly Different Euro Value

Return to the opening example with real numbers attached. Assume a €300 million European fund and a $90 billion US platform each return a healthy multiple on capital, and each allocates 20% of profit to carry, split so that a given partner in each firm holds two percentage points of that pool.

At the level of one fund of identical size, the two numbers land in the same place, because the arithmetic is genuinely identical. The gap opens the moment the comparison moves from "one fund of equal size" to "a firm's actual scale," because a $90 billion platform is not running one $300 million fund.

It is running a portfolio of vehicles that, combined, dwarf almost every European fund's total disclosed size many times over, and a partner's real carry economics there typically span more than one of those vehicles.

Cash-to-Carry Ratio: Cash Now vs Carry Sooner

A second-order effect follows directly from the fee-size gap above. A larger US platform, with a bigger fee pool, can afford to pay more cash at junior levels without leaning as hard on carry to make an offer competitive. A smaller European fund, working from a thinner fee base, often cannot match that cash figure and instead offers earlier or broader carry participation to close the gap.

Neither approach is more generous in absolute terms. A larger cash-to-carry ratio at a US junior level means more certain, immediate money, since a bonus is realised well before any fund distributes.

A European fund's earlier carry participation means a real allocation, but one still subject to the same vesting and distribution mechanics that govern any carry grant: it typically vests over three to four years and only pays out once the fund itself has returned cash to its investors, which on a roughly ten-year fund can take most of a decade.

• A US junior offer weighted toward cash is easier to value today, since a bonus figure is a known quantity once earned.
• A European junior offer weighted toward earlier carry participation is harder to value today, since it depends on the fund's eventual performance and its own distribution timeline.
• Neither structure is a trick. Each fits the fee base it is funded from, and comparing the two requires pricing the carry as the long-dated, uncertain claim it actually is, not as if it were interchangeable with cash.

Junior Carry: Who Actually Gets It, and When

The European and US patterns diverge again once the question narrows to who receives carry at the junior end specifically, rather than at principal level and above.

The European benchmark cited earlier found junior carry adoption is highest at small funds, which fits the broader cash-to-carry story: a small fund with limited cash to offer often reaches for carry, even at analyst or associate level, as the lever it does have available.

A well-capitalised European fund, by contrast, can sometimes afford to delay meaningful carry until principal level, the same pattern a large US platform follows, simply because it has the cash budget to compete without it earlier.

On the US side, a widely used compensation guide notes senior associate carry allocations can reach up to roughly 2% at some firms, a genuine allocation rather than a symbolic one. That figure sits later on the ladder than where European carry sometimes starts, consistent with the idea that US firms, backed by a larger average fee base, do not need to lean on carry as an analyst-level retention tool the way a smaller European fund sometimes does.

Tax Treatment Turns an Identical Offer Into Four Different Numbers

Even a genuinely identical pre-tax carry allocation does not survive contact with four different tax systems unchanged. The UK, Germany, France and the US each treat carried interest differently enough that the same headline percentage produces meaningfully different take-home money.

Even without doing the full calculation, the ranking is informative on its own: Germany's effective rate on qualifying carry sits meaningfully below the UK's post-2026 rate, and France's flat 30% sits between the two, while the US federal rate sits below all three European figures shown, before any US state tax is added on top.

United States (federal only)

23.8%

Germany

~28.5%

France

30%

United Kingdom

~34%

Same 20% headline carry rate, four different tax regimes. US state tax is additional and not shown here.

The Same Million, Four Take-Home Numbers

Applying those approximate rates to the same round number of carry makes the gap concrete rather than abstract.

Why a London Offer and a Berlin Offer Are Not the Same Offer

Put the last two sections together and a London offer and a Berlin offer stop being comparable on salary alone, even before either one is compared to a US number.

• London pays the highest base salaries in Europe on average, per both benchmarks cited above, but UK carry now carries the least favourable tax treatment of the three European jurisdictions examined here.
• Berlin's German-market premium on base salary, roughly 10% to 25% above the European average excluding the UK, sits alongside Germany's meaningfully lower effective carry tax rate.
• A candidate weighing a higher London base against a Berlin offer with a real carry allocation is not comparing two salary numbers. They are comparing a cash-heavy, higher-tax-on-upside package against a somewhat lower-cash, better-taxed-upside one, and which one wins depends entirely on how much of the total package is actually carry.

None of this makes one city objectively better to work in than the other. It means the same nominal salary gap between two European cities can shrink, widen or reverse once carry and its tax treatment are added to the comparison, which is precisely the calculation a currency converter alone cannot do.

Why a US Headline Number Is Not a Number You Can Compare Directly

Everything above compounds once the comparison crosses the Atlantic. A US salary figure needs at least four separate adjustments before it means anything next to a European one.

1. Fund size, since the same job title at a small European fund and a large US platform draw from fee pools that can differ by an order of magnitude or more.
2. Cash-to-carry mix, since a headline US cash figure often reflects a larger fee base funding more cash at junior levels, not a universally more generous approach to compensation.
3. Carry's actual value, since a percentage with no fund size, vesting schedule or distribution history attached is not a number worth comparing to anything.
4. Tax treatment, since the US federal rate on qualifying carry sits below the equivalent European rates examined here, meaning a nominally similar carry allocation can be worth noticeably more after tax on the US side, independent of the fund-size gap.

What to Actually Ask When Comparing a European Offer to a US One

Given how much a headline number leaves out, the useful diligence looks different from simply asking for a bigger base.

1. What is the fund's approximate size, and roughly how does that compare to the other offer's fund, not just the two firms' reputations.
2. What is the actual cash-to-carry split at this level, stated in real numbers rather than "competitive base plus meaningful upside."
3. If carry is offered, what is the vesting schedule, and has this specific fund distributed any carry yet.
4. What is the after-tax treatment of both the salary and the carry in the country and legal structure actually being offered, not a generic assumption carried over from a different jurisdiction.
5. What did the last person in this exact seat actually end up with, in cash and in realised carry, rather than what the offer promises on paper.

The Bottom Line

The gap between European and US venture pay starts with fund size, not talent or ambition. A management fee applied to a smaller fund produces a smaller cash pool at every level, and the same carry percentage applied to a smaller fund produces a smaller absolute number, however identical the contractual language looks on paper.

Everything else in this article follows from that one fact. Europe leans on earlier carry participation to compete against thinner cash budgets. The US leans on a larger fee base to offer richer cash, particularly at junior levels. Four different tax regimes then apply four different haircuts to whatever carry either side eventually pays out, turning an identical pre-tax percentage into genuinely different take-home money.

None of that means a European seat is a worse one, or that a US number is automatically the better offer. It means neither number means anything on its own. The real comparison runs through fund size, cash-to-carry mix and after-tax treatment, in that order, and a candidate who does that work is comparing two actual offers. A candidate who only converts the currency is comparing two numbers that were never the same thing to begin with.