The private equity model has definitely changed over the past few years. I didn’t mention that some private equity firms have take equity stakes (not controlling stakes) in some vendors recently notably Halogen Software and The Right Thing (with AIRS). This type of growth capital has been typically the playground for venture capital firms not private equity.

I guess it shows that many of the lines are blurring when it comes to choosing the right investor/partner. Hence why I think its important for customers to understand what the ownership structure looks like with their HR vendors.

Also, historically PE firms were known as patient investors with a long horizon because their money came from private individuals (hence the name) and pension funds who only needed returns as their employees retired. That has changed for some firms.

Had lunch with a Vista partner recently in San Francisco who claimed they tend to hold their investment from seven-to-eight years, which is certainly longer than your average VC.

We’ll see how it all shakes out. Certainly you are correct that they invest when they see a company could make a lot more money that it is now. Whether the path to that includes improving the product — as well as cutting costs — remains to be seen.

Kronos CEO Aron Ain has nothing but good things to say about his relatively new PE owners, but of course, they are his boss!