The relatively new, but growing, trend of labor unions getting involved in the private-equity markets raises an intriguing question for entrepreneurs, most of whom are desperate for growth capital but are determined to maintain their management independence -- which usually means that they don't want anyone telling them how to handle or reward their workforces.

What happens when union pension funds (which hold about $250 billion in assets) -- and perhaps collectively bargained corporate pension funds (which hold about $1.04 trillion) and public-sector pension funds (another $2.09 trillion) -- consider tying their investments in start-ups and small private companies to employee quality of work-life concessions as well as to traditional financial objectives?

Put bluntly: should you walk away from this type of deal, if you're fortunate enough to have one come your way, or view such an offer as a win-win scenario in which your workers will benefit while you and your company do?

Answer: sorry, there aren't any easy answers, at least for now. But for entrepreneurs who want to learn more about how these investments have played themselves out during the past decade -- as well as the increasingly diverse forms that these deals have taken -- there's a book well worth reading: Working Capital: The Power of Labor's Pensions, edited by Archon Fung, Tessa Hebb, and Joel Rogers (Cornell University Press/ILR Press, 2001). Over the course of 220 pages and nine essays, this book gives a great overview of everything from the remarkable success of the socially responsible investment movement, which is really the predecessor for recent union initiatives, to the involvement of labor unions in venture capital in Canada, where they've played a role similar to that of many state economic-development initiatives in the United States.

Granted, some of these essays will tell you more than you need to know. But I, for example, found it completely fascinating to read about the fiduciary issues that have blocked many pension-fund managers from even considering private-equity investments in the past. That's been bad news for America's entrepreneurs, since those managers control huge sums of capital that could make a difference for many young, cash-strapped ventures. But enlightened members of the organized-labor community are working to change that, primarily through the efforts of group known as the Heartland Forum, which has been supported by the United Steelworkers of America, along with some prominent nonprofit foundations. It has launched a range of different educational initiatives to help instruct pension-fund managers about the clear advantages of including private-equity investments within their huge portfolios.

For most owners, the chapter not to miss is Michael Calabrese's "Building on Success: Labor-Friendly Investment Vehicles and the Power of Private Equity." In just 34 pages, Calabrese does a great job of analyzing the different types of deals -- meaning, owner concessions in return for growth-capital or working-capital investments -- that have succeeded so far. For entrepreneurs who are open to this type of relationship with potential backers, this chapter should generate some good ideas about new ways to hunt for capital. And for those who ultimately wouldn't consider a financial partnership with a union pension fund, reading this book offers a quick and painless way to make an informed decision.