There are two major types of buy outs, leveraged buy outs (LBOs) and management buy outs (MBOs). Both are organised by the existing management of the company. An MBO involves the acquisition of a product or business from either a public or private entity through the assistance of a venture capital or private equity firm. Financing is usually through the provision of equity. An LBO involves the acquisition of a product or business from either a public or private entity using a significant amount of debt and little or no equity (usually a ratio of 90% debt and 10% equity). In other words, the purchaser uses borrowed money for the acquisition, using the company’s assets as collateral for the loan.