Private equity firms have been getting a bad rap. They’re like the Rodney Dangerfield of the financial industry – they get no respect.

But there’s a compelling case on why they should. The private equity industry in the U.S. comprises nearly 2,400 investment firms. They operate nearly 14,800 U.S.-based businesses in all 50 states and all Congressional districts. These companies employ approximately 8.1 million people. In 2010 alone, U.S. private equity firms invested nearly $150 billion in over 1,200 U.S.-based companies.

In an effort to explain just what private equity is and why it’s important, the Private Equity Growth Capital Council has released a new whiteboard video that explains private equity, how it works and who benefits. Here’s how PEGCC describes it:

“What is Private Equity?” is the first in a new wave of videos produced as part of PEGCC’s “Private Equity at Work” initiative launched earlier this year, and is the fifth video released in the series.  The whiteboard illustration style brings the private equity business model to life.  The video describes the process by which private equity firms partner with investors such as pension funds and charitable endowments to purchase companies that need capital and expertise to grow or retool.  It demonstrates how private equity drives economic growth, strengthens business and provides financial security to millions of Americans.”

Last year, the Chamber of Commerce issued a report, Sources of Capital and Economic Growth: Interconnected and Diverse Markets Driving U.S. Competition. The purpose of the report was to demonstrate the wide variety and diversity of capital needed to fuel business expansion and job growth. This diverse quilt includes credit cards for entrepenuers working in their garage, complicated debt markets for large international companies, and private equity which is a critical source of funding and management to turn around struggling businesses.