Private equity funds buy a controlling stake in a mature, cash-generative business, usually with board control and a five to seven year hold. Venture capital, by contrast, buys a minority stake in an earlier, growing business, which is where a first finance hire or first CFO search almost always sits.
What private equity actually is
Private equity (PE) is capital from a fund that buys an ownership stake, usually a majority or outright control, in a private company. The fund typically backs a buyout, a roll-up of several smaller businesses, or an operational turnaround, then works the business for roughly five to seven years before selling it, floating it, or passing it to another fund. That is the textbook definition, and it is worth knowing because founders searching “private equity” are often trying to work out whether the term applies to their own raise.
Most of the businesses I work with are not PE targets. They are Australian VC-backed startups and scale-ups: growing fast, not yet consistently profitable, and raising minority capital from a venture fund that wants growth, not control. I asked Tom Hunter, who runs Story Recruitment, where the two markets actually split. “I primarily focus on the VC end of the market, which involves smaller, high-growth companies, in contrast to PE businesses that are generally further along the scale journey.”[1]
Why a PE-backed business is a different finance job
The work changes with the ownership. A PE-backed CFO reports to a fund with a defined exit horizon and a board that expects monthly reporting discipline from day one, not the looser cadence a Series A board will often accept. Tom put it plainly: from the outside, “PE backed businesses appear ‘all sexiness and attract’ with growth, but the reality is ‘full on’ and ‘intense.’”[2] The fund is not a passive investor; it is an active owner with its own reporting calendar and its own view of value creation.
One thing PE-backed CFOs describe consistently: the fund does not always share its exit timeline openly, which leaves the finance leader planning without knowing whether the horizon is eighteen months or five years. As Tom hears it, that can leave a CFO “operating in the dark.”[3] It is a real reason to ask about exit plans directly in the interview, before taking the seat, not after.
Where PE money actually shows up for a founder I work with
The line between venture and PE is not always clean. Growth equity deals, later secondaries, and roll-up strategies in fragmented AU sectors increasingly sit between the two, and a business can take PE-style capital while still needing the same finance foundations a VC-backed scale-up needs: a clean close, a model an investor trusts, and someone who owns both. That is the point where my work intersects PE, even though the deal structure on top of it is not something I advise on.
If a raise or a new investor is the trigger, I set out when that actually means hiring a CFO versus a Head of Finance.
What a PE-backed finance seat pays in Australia
Because the reporting load and the investor relationship are heavier, PE-backed finance roles are priced accordingly. In the market Tom sees, CFO roles at PE-backed companies command $350,000 to $450,000, often with a long-term incentive component that grows as the business moves through its hold period.[4] That sits meaningfully above the $275,000 to $375,000 range a VC-backed Series A or B CFO typically commands, which reflects the governance and reporting intensity a fund expects on day one.
I set out the full CFO salary bands by stage, Series A through Series C and pre-IPO.
Common questions
What is the difference between private equity and venture capital?
Venture capital buys a minority stake in an early, fast-growing business that is often not yet profitable, and backs revenue and headcount growth. Private equity buys a majority or controlling stake in a more mature, cash-generative business, and backs a buyout, a roll-up or a turnaround, usually with a five to seven year hold. Most Australian startups and scale-ups raising capital are dealing with VC, not PE.
Does Story Recruitment place CFOs into PE-backed businesses?
My focus stays on the VC end of the market, the first finance hire around 10 to 20 heads and $5m to $10m ARR, then the first CFO from Series A through Series C, which puts a PE-backed business further along the scale journey outside my core lane, even though it usually needs the same finance foundations built much earlier on.
Why do PE-backed CFOs get paid more than VC-backed ones?
The reporting cadence and governance load are heavier from day one: a fund typically wants monthly board packs, tight covenant tracking and a clear line to its own exit plan. In the market I see, that pushes PE-backed CFO pay to $350,000 to $450,000, against $275,000 to $375,000 for a VC-backed Series A or B CFO, plus a long-term incentive component in both cases.
What should a CFO ask before joining a PE-backed business?
Ask about the exit timeline directly, because funds do not always volunteer it, and planning without a clear horizon is planning in the dark. Worth asking too: what reporting cadence the fund expects, and how much of the finance function existed before the deal closed versus after.
References
- From a call I had recently: my recruitment practice sits on the VC end of the market, smaller high-growth companies, not the more mature PE-backed businesses further along the scale journey.
- What PE-backed CFOs tell me: the growth looks glamorous from the outside, but running the function inside one of these businesses is full on and intense.
- A pattern I hear often from PE-backed finance leaders: the fund does not always share its exit timeline, which leaves them planning without a clear horizon.
- From the roles I see in market: PE-backed CFO packages run $350,000 to $450,000, often with an LTI component that grows through the fund's hold period.
These guides set out how we see it, drawn from the searches we run and the finance leaders we place. They are general information about the market, not financial, accounting or legal advice, and they are no substitute for advice on your own circumstances.