Private equity investors, including venture capitalists and private equity funds, play a major role in the creation and viability of new service providers.
Venture capitalists are looking for hyper-growth opportunities for a possible 100 to 1 profit over a 5- to 7-year period.
Private equity funds and other private investors may be a little tamer, investing in mezzanine and later stage service providers with lower risks and lower rewards.
Private equity investors are increasingly banding together so that, either alone or with joint investors, they can take over public companies and return them to private status.
In outsourcing, certain private equity funds and venture capitalists have been at the forefront of creating and incubating new global service providers in technology, medicine and other verticals.