Private equity (PE) financing is money invested by PE firms in privately owned businesses. PE financing is often used to buy out some or all of the ownership interests of the owners of a business (target company). PE firms often use debt to finance these buyout transactions—with the target company taking on significant loans to secure the money (capital) to buy out the current owners of the business. The target company must, of course, pay back these loans from its lenders, with interest. Because of this use of debt financing, these buyouts have traditionally been called leveraged buyouts (LBOs).

In Virginia, private equity (PE) financing operates under a combination of state statutes and federal law. PE firms invest in privately held companies, often to acquire ownership stakes through buyouts. These transactions frequently involve leveraged buyouts (LBOs), where the acquisition is financed through significant debt that the target company assumes. The target company is then responsible for repaying the loans with interest. Virginia's regulations on such transactions are influenced by general corporate law, securities law, and contract law, which govern the structuring of these deals, the responsibilities of the parties involved, and the disclosures required. Additionally, federal laws, including the Securities Act of 1933 and the Securities Exchange Act of 1934, as well as regulations enforced by the Securities and Exchange Commission (SEC), provide a framework for securities transactions, which include PE investments. These laws ensure investor protection, financial disclosure, and the regulation of securities markets. It is advisable for companies and PE firms to consult with an attorney to navigate the complex legal landscape associated with PE financing and LBOs.