what is a liquidity event 
a liquidity event is an acquisition merger initial public offering ipo or other action that allows founders and early investors in a company to cash out some or all of their ownership shares a liquidity event is considered an exit strategy for an illiquid investment or equity with little or no market to trade on founders of a firm push toward a liquidity event and investors like venture capital vc firms angel investors or private equity firms expect one within a reasonable amount of time after initially investing capital types of liquidity eventsa liquidity event is most commonly associated with founders and venture capital firms cashing in on their seed or early round investments the first handful of employees of the companies also stand to reap the windfall of their company going public or being bought out by another company in the case of an acquisition the founders and employees of the firm are usually retained there may be an initial liquidity event followed by additional compensation in shares or cash as they serve out their contracted terms with the new owners the most common liquidity events are ip0s and direct acquisitions by other companies or private equity firms the founders rolein some cases a liquidity event is not necessarily the goal of the founders of a firm though it certainly is for investors founders may not be motivated by the riches that a liquidity event bestows some founders may resist calls from early investors to take a company public out of fear of losing control mark zuckerberg his cofounders and the venture capital firms and individuals listed as shareholders in facebook s now meta pre ipo form s 1 filing in 2012 had a lot of positivity for its liquidity event the company raised 16 billion in the ipo and began its first day as a publicly traded company with a valuation of 107 billion zuckerberg who owned 28 2 of facebook now meta before the ipo ended with a net worth of approximately 19 1 billion 1