Glen Leibowitz

If you’re preparing for an exit and exploring options beyond the standard IPO or acquisition, a leveraged buyout (LBO) might be worth your attention. While this strategy is more commonly associated with mature companies, it can offer a compelling exit path for founders of growth-stage businesses with stable cash flows and a strong asset base. In this article, you’ll learn what an LBO involves, how it works, and whether your company might be a good fit for one. You’ll also gain clarity on what you can expect if you’re approached by a private equity firm—or decide to initiate an LBO deal yourself. What Is a Leveraged Buyout? A leveraged buyout occurs when a company is acquired using mostly borrowed money. The buyer—typically a private equity firm —uses a mix of debt and a smaller portion of equity to fund the purchase. The assets and cash flow of your company are often used to secure and repay that debt. From your standpoint as a founder, this means your business is being purchased with ...