I've not been involved in a situation like this either; however, I have no problem investing in private companies as long as I can get some information about them and have someone to discuss the information with.
What led me to Daleen was SAIC's involvement with the company. SAIC is a private company too but they file all SEC-required reports with the SEC just like any public company. I'm getting ready to contact Daleen and ask if they will be doing something similar.
I bought Daleen after the 1-for-500 reverse split announcement because of the seeming inconsistency of the company offering 0.30/share while the stock was trading at 0.12/share. The low P/S ratio was an additional factor.