Liquidity Event

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Dictionary Says

Definition of 'Liquidity Event'

An event that allows initial investors in a company to cash out some or all of their ownership shares and is considered an exit strategy for an illiquid investment. Liquidity events are typically used in conjunction with venture capital/angel investors or private equity firms, which will aim to reach one within a reasonable amount of time after initially making an investment.

The most common liquidity events are initial public offerings (IPOs) and direct acquisitions by other corporations or private equity firms.  
Investopedia Says

Investopedia explains 'Liquidity Event'

The most valuable asset in the world loses much of its luster if you can't sell it. As a result, liquidity events are always being considered when an investor or group holds illiquid equity in a company.  

Many venture capital and private equity firms have established time periods after which they need to find some way to achieve liquidity, if for no other reason than to achieve and measure an internal rate of return for the investment.  
Search results for

'Liquidity Event'

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    ... The heart of the VC process is a trajectory from the point when a company has proven
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  • What is a liquidity squeeze?

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    A liquidity squeeze occurs when a financial event sparks concerns among financial
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  • Series 66 Study Guide - Portfolio Risks - Bond Risks ...

    http://www.investopedia.com/exam-guide/series-66/portfolio-risks/bond-risks.asp
    ... Liquidity risk - This refers to the marketability of the bond. Certain issuers may
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  • How To Invest In Private Companies

    http://www.investopedia.com/articles/basics/11/investing-in-private-companies.asp
    ... long investing time frames. Most investors will also need an eventual
    liquidity event to cash out. This includes when the company ...

  • Why Successful Business Owners Sell Out

    http://www.investopedia.com/articles/08/sell-side.asp
    ... Unlocking this equity through a liquidity event may reduce the seller's risk by
    diversifying his or her portfolio and allowing the seller to free up more cash. ...

  • Using Public SEC Filings To Analyze Companies

    http://www.investopedia.com/articles/fundamental-analysis/11/private-foreign-sec-filings.asp
    ... The minute a private equity firm consummates a buyout deal, it starts thinking of
    a liquidity event in the future to turn a profit on its investment and for ...

  • CFA Level 1 Study Guide - Fixed Income Investments - Event Risk ...

    http://www.investopedia.com/exam-guide/cfa-level-1/fixed-income-investments/event-risk.asp
    ... Risk; 14.12 Yield Curve Risk; 14.13 Credit Risk; 14.14 Liquidity Risk; 14.15
    Exchange-Rate Risk; 14.16 Volatility Risk; 14.17 Inflation Risk; 14.18 Event Risk; ...

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    http://www.investopedia.com/articles/trading/04/011404.asp
    Market psychology is an undeniably powerful force.
    Find out what you can do about it.

  • CFA Level 1 Study Guide - Fixed Income Investments - Liquidity ...

    http://www.investopedia.com/exam-guide/cfa-level-1/fixed-income-investments/liquidity-risk.asp
    ... Risk; 14.12 Yield Curve Risk; 14.13 Credit Risk; 14.14 Liquidity Risk; 14.15
    Exchange-Rate Risk; 14.16 Volatility Risk; 14.17 Inflation Risk; 14.18 Event Risk; ...

  • CFA Level 1 Study Guide - Financial Ratios - Internal Liquidity ...

    http://www.investopedia.com/exam-guide/cfa-level-1/financial-ratios/internal-liquidity-ratios.asp
    ... Risk; 14.12 Yield Curve Risk; 14.13 Credit Risk; 14.14 Liquidity Risk; 14.15
    Exchange-Rate Risk; 14.16 Volatility Risk; 14.17 Inflation Risk; 14.18 Event Risk; ...

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