Buyout funds refer to a class of private equity funds that are organized to buy established companies with strong records of profitability. Some buyout funds seek to own 100% of a business, while other buyout funds are content to own a smaller stake in companies with future growth potential. Buyout funds do not invest in or acquire seed-stage or early-stage businesses. Their objective is to invest in profitable businesses in specific industry sectors which have little risk of business closure or product or service obsolescence.

Buyout funds may be a perfect fit for business owners who want to cash out of a business and retire. They may also be a perfect funding fit for business owners who are not ready to retire but want to reduce the amount of capital they have tied up in a business.