Browse Definitions :
Definition

liquidity event

A liquidity event is a corporate activity in which illiquid assets such as shares are made liquid and distributed to business owners and investors.

The liquid assets of a business include not only cash on hand but also any assets that can readily be converted to cash, such as accounts receivable amounts. Liquidity events are considered exit strategies in which owners and investors terminate some endeavor to cash in shares and other illiquid investments. Common examples of liquidity events include IPOs (initial public offerings) and acquisition of a business by another corporation or a private equity firm.

There is always risk involved with holding illiquid equity in a company. Venture capital (VC) firms and other investors often establish timelines for achieving liquidity, which is typically their end goal for funding a startup. Funds invested in such speculative ventures are sometimes referred to as risk capital.

Liquidity event is not synonymous with liquidation, which is the discontinuation of business for a company and involves redistribution of corporate assets.

This was last updated in April 2016

Continue Reading About liquidity event

SearchCompliance

  • information governance

    Information governance is a holistic approach to managing corporate information by implementing processes, roles, controls and ...

  • enterprise document management (EDM)

    Enterprise document management (EDM) is a strategy for overseeing an organization's paper and electronic documents so they can be...

  • risk assessment

    Risk assessment is the identification of hazards that could negatively impact an organization's ability to conduct business.

SearchSecurity

  • honeypot (computing)

    A honeypot is a network-attached system set up as a decoy to lure cyber attackers and detect, deflect and study hacking attempts ...

  • spam trap

    A spam trap is an email address that is used to identify and monitor spam email.

  • cracker

    A cracker is someone who breaks into someone else's computer system, often on a network; bypasses passwords or licenses in ...

SearchHealthIT

SearchDisasterRecovery

  • risk mitigation

    Risk mitigation is a strategy to prepare for and lessen the effects of threats faced by a business.

  • call tree

    A call tree is a layered hierarchical communication model that is used to notify specific individuals of an event and coordinate ...

  • Disaster Recovery as a Service (DRaaS)

    Disaster recovery as a service (DRaaS) is the replication and hosting of physical or virtual servers by a third party to provide ...

SearchStorage

  • storage virtualization

    Storage virtualization is the pooling of physical storage from multiple storage devices into what appears to be a single storage ...

  • erasure coding

    Erasure coding (EC) is a method of data protection in which data is broken into fragments, expanded and encoded with redundant ...

  • continuous data protection

    Continuous data protection (CDP), also known as continuous backup, is a backup and recovery storage system in which all the data ...

Close