Startup Terms Glossary
What is a Liquidation Event?
A liquidation event is a transaction or series of transactions completed to close down a business. Liquidation events can be voluntary or involuntary and exist to convert tangible and non-tangible assets into cash. A liquidation event might consist of the sale of a company in exchange for stocks or shares. It can also constitute an initial public offering, or offering shares of the company to the public to raise money for the business.
Liquidation Event Examples
Example of liquidation event:
- Example 1. Juan owns stock in a gaming company called Bluetorch. When Bluetorch is purchased by a more formidable gaming company called Redflame, he is given a cash payment by the acquiring company in exchange for his shares in Bluetorch during a liquidation event.
This page also discusses a liquidation event.
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