Liquidity Event

Any event that lets shareholders turn their equity into cash, an acquisition, IPO, or secondary sale. The moment paper wealth becomes real.

Why it matters

Until a liquidity event, equity is just paper, which is why founders and employees care about the timing and form of one. Understanding when and how liquidity might come shapes decisions about equity, secondaries, and staying power.

For example

An acquisition finally lets employees sell the shares they had held for years, the liquidity event that turns paper wealth into real money.

Worth your time

Related terms

Exit Secondary Sale Initial Public Offering

Go deeper

See how founders actually handle this on Founder life, part of the Starting Up hub.

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