Conducting a thorough business due diligence is the critical factor in determining the success or failure of a private equity investment. ^[1] Private equity firms acquire companies primarily to purchase undervalued or improvable assets, increase their value, and sell them in the future to generate investment returns. ^[2] A 2026 study in Annals of Surgery found that rural hospitals acquired by private equity experienced increases in postoperative mortality and complications compared with similar hospitals that were not acquired. ^[3] Between 2019 and 2023, private equity firms completed 65% of all physician-practice acquisitions. ^[4] Since 2005, 197 rural hospitals have closed or converted to other uses, with roughly half operating at a loss and 418 considered vulnerable to closure. ^[5] The collapse of Massachusetts-based Steward Health Care resulted in an estimated $1.3 billion being hauled off by its private equity owner and executives before the system entered bankruptcy in 2024 with more than $9 billion in liabilities. ^[6] The author, a leader at a private equity consulting firm, has conducted over 100 business due diligence projects for private equity firms and corporate clients over the past 10 years. ^[7] Two years after the private equity firm acquired the mid-sized enterprise, they were unable to accurately determine the reasons for changes in the company's sales and performance. ^[8]