Private equity funds leverage the transaction of acquiring a company and increasing its value. If the private equity firm manages to sell the company at a profit, the profit is significant, but if they don’t – the risk is also substantial. Private equity firms leverage their experience, resources, and strategic skills. To do so, the firms carefully and deeply explore multiple companies, then depict one which offers the best expectations for growth. Next, they create a strategic plan and examine if the strategy can be implemented and what the cost would be. If the analysis shows that the return on investment will be significant, then they go forward with the purchase phase.