Insight
The Real Differences Between Venture Capital and Private Equity Cultures
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Switching between the culture of venture capital and the measured, detail-focused environment of private equity is no small adjustment. The two investment models require distinct ways of leading and making decisions, and moving between them can fundamentally alter a company’s mindset and direction.
In a recent episode of Chat CFO, Jenny Collins, Head of Talent at Faraday Partners and former Google and PE Chief Talent Officer, shares her first-hand experience working in both VC-backed and PE-backed businesses. Drawing on a career that spans high-growth tech ventures and established portfolio companies, she explains how differences in risk appetite and investor expectations shape leadership in each setting. The conversation also explores how to bridge cultural gaps while keeping teams engaged over varying investment timeframes, finding ways to combine the strongest elements of both approaches without losing what makes each distinctive.
Moving between worlds
Jenny Collins has seen both sides. She’s experienced the sharp contrast between the high-energy, experimental pace of VC-backed tech and the steady, structured rhythm of private equity. Her work has spanned beanbag-filled offices at Google and boardrooms in traditional investment environments, with cultural shifts every bit as stark as the change in scenery.
“I got used to Californian ways of thinking and doing things,” she recalls, “and had to help translate that culture into the UK.”
That meant bridging two very different mindsets. The tech side often embraced risk, the idea of “failing fast” and learning as you go. In private equity, the stakes are different. “You’re focused on making sure you don’t make the mistake,” Jenny says. “Errors are so big, it’s much more serious and much more about staying on the right track.”
Risk and decision-making styles
In VC-backed companies, the push to innovate is constant. Trying something new, even if it fails, is often part of the process. As Jenny puts it, “You want to take the chance and see if it works and then make your mistakes so someone else doesn’t do it.”
By contrast, PE-backed firms tend to move with more caution. Decisions are heavily scrutinised, and frameworks are built to reduce uncertainty before acting. It’s about safeguarding major investments and keeping mistakes to a minimum.
Jenny’s approach has been to take some of the decision-making tools from tech and gently introduce them to more traditional environments. “Let’s get some numbers behind what we’re looking at,” she says, describing how she’s brought a “modern culture” into risk-averse spaces without bulldozing what already works.
“The biggest mistake in tech is wanting to fail fast. You’re wanting to take a chance and see if it works, and then you make your mistakes so that someone else doesn’t do it.
In the institutional environment it’s making sure you don’t make the mistake, because the numbers in it are so big. Take it to the next stage of your work, but do it quickly, learn from your mistakes, talk about your mistakes.
In a more traditional way, you’re FC approved and you’re making sure that everything is exacting. The errors are so big, it’s much more serious and much more about staying on the right track.” – Jenny Collins, Head of Talent at Faraday Partners
How investors shape behaviour
Part of the cultural difference comes from the investors themselves. In VC, the goal is often rapid growth, a push for market share, and a readiness to pivot. “They haven’t made the money yet, so they don’t know what they’re doing, it’s an adventure,” Jenny says with a smile.
PE investors, on the other hand, usually arrive when the product is proven, and revenue is flowing. “Private equities are really trying to hone it and internationalise it,” Jenny explains. That means longer hold periods, especially in the current market. The challenge then becomes keeping people motivated over that extended time.
“How do you keep people’s energy up for a longer period? Or do you incentivise them for shorter bursts?” she asks. These are conversations she believes should happen at the very start, even during interviews, so expectations are clear.
The challenge of cultural transitions
Jenny’s own move into private equity meant another cultural shift, this time from progressive, informal environments to more traditional corporate structures.
She talks about the importance of introducing change at the right pace. That has included setting diversity and inclusion as an objective but building towards it gradually. “We were definitely managing to achieve it in the traditional environment,” she says, noting that it’s as much about how you shape the board’s conversations as it is about hiring.
Her view is that diversity can’t rest on the shoulders of a single “different” board member. The responsibility for inclusion should be shared across leadership, with the chair or chairwoman actively encouraging different perspectives. “You don’t put pressure on them to be the different thinker, it needs to be done by everyone,” she says.
What’s next for private equity and ESG? Adapting leadership expectations
Leadership expectations also differ between the two worlds. In VC-backed companies, founders often still hold key technical roles, meaning leadership styles can be shaped by product and engineering mindsets. In PE-backed companies, there’s often more emphasis on operational rigour and market expansion.
Jenny’s time at Mayfair, for example, involved working with an organisational psychologist to assess portfolio companies and decide what leadership skills were needed for the next phase, whether that meant international expansion, a shift to subscription models, or targeting new markets.
“Taking a company from 200 people to 1,000 needs different skills,” she says. “The sooner you can work out what’s required, the more effective you can be.”
Where VC can learn from PE, and vice versa
Jenny sees growing crossover in the way investors operate. Some PE firms, including Mayfair, now look beyond financial modelling to value creation strategies, helping portfolio companies grow internally rather than just adding debt and waiting for market gains.
“VCs have done a little of this, but to a lesser amount,” she notes, pointing out that some, like Atomico, already provide hands-on help with scaling and operational improvements.
For PE, she believes there’s value in embracing the VC-style willingness to experiment and adapt quickly when markets shift. For VC, adopting PE’s discipline in structured processes and careful risk oversight could lead to stronger long-term decisions.
“Once they’ve got their product and it’s making money, that’s when I suppose private equity are coming in and just really trying to hone it and internationalise it.
The hold periods have extended a lot because of the markets at the moment. It’s a longer play.
And I think the main thing that we’re looking at at that stage is how do you keep people? How do you incentivise people to stay? You know, you’re working very hard when you’re in a private equity invested company. How do you keep people’s energy up for a longer period of time?”
– Jenny Collins, Head of Talent at Faraday Partners
Incentives beyond the exit
One of Jenny’s strongest messages for PE-backed companies is that incentives can’t all be tied to the eventual sale. With hold periods stretching longer, she suggests introducing rewards at key points along the growth journey.
“Different mechanisms but just being clear from the outset, that’s the key,” she says. Whether that’s tied to hitting market expansion milestones or achieving operational targets, it’s about keeping momentum and engagement alive over the long term.
Leading with awareness
Whether in a VC-backed startup or a PE portfolio company, Jenny comes back to the same principle, clarity. That means setting expectations with clarity and backing them up with well-defined decision-making and transparent communication about risks and rewards.
It also means recognising that leadership is shaped by its environment. In her view, bringing the best of both cultures together is possible, but it takes patience and an openness to shifting the pace of change as circumstances evolve.
Key takeaways from Jenny’s insights
- VC and PE differ in their risk appetite: VC embraces failing fast, PE focuses on avoiding costly mistakes.
- Investor expectations shape culture: VC chases rapid growth and flexibility, PE prioritises operational excellence and longer-term stability.
- Cultural change in traditional environments should be gradual, with diversity and inclusion embedded at the leadership level.
- PE can benefit from VC’s agility. VC can learn from PE’s disciplined processes and data-led decision-making.
- Incentives in PE should recognise milestones along the journey, not just the exit.
Listen to the episode of the STOIX Podcast
To hear Jenny Collins’ full conversation, watch the complete podcast episode here:
To connect with Jenny or explore more of her experience and insights, head over to Jenny’s LinkedIn profile.