liquidity-events

Vocabulary Word

Definition

'Liquidity events' are occasions when an investment can be converted into cash. This could be when a company you've invested in is bought by another company or goes public.

Examples in Different Contexts

For financial planning, 'liquidity events' refer to moments when assets can be quickly converted to cash, impacting an individual's or company's financial situation. A financial planner might advise, 'Planning for liquidity events, like selling a property, requires careful consideration of tax implications and timing.'

Practice Scenarios

Academics

Scenario:

In our next lecture, we'll be discussing how investment banks help companies navigate through various exit options.

Response:

Sure, understanding the dynamics of liquidity events will be beneficial for us as future finance professionals.

Startup

Scenario:

The tech startup we've invested in shows great potential. It could be a game-changer for our fund if they continue to perform well.

Response:

I agree. As a significant liquidity event, an acquisition or merger could exponentially increase the value of our fund.