A liquidity event is a merger, acquisition, 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.
ESOP is designed to deliver an unexceptional customer experience with the management of liquidity events by unlisted companies embedding their needs and priorities on ESOP. A liquidity event is a form of exit strategy by private equity firms. Reasons for liquidity events can be legal reasons, and the profit target is reached, loss prevention, etc.
KEY POINTS FOR LIQUIDITY EVENT-
- A liquidity event allows company founders and early investors to convert illiquid equity into cash through events such as an IPO or direct acquisition by another company.
- Investors who back a start-up expect to be able to take their money out within a reasonable amount of time.
- While most investors favor liquidity events, founders may not be so eager if the event means diluting their holdings or losing control of their company.
It is an excellent platform that enables you to create and save multiple scenarios around the number of funds available. other positive aspects are-
- Event planning
- Analyze liquidity scenario and finalization
- Real-time dashboard for employees and company
- Employee communication and tracking
- Liquidity exercise and fund allocation
- Payout and event closure