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Dictionary by pitch.dog
Exits, liquidity & investor returns · Working

Employee liquidity

Also called: employee secondary

ELI5

Employees can turn some equity into cash.

Used in conversation

“Employee liquidity can reduce pressure before an exit.”

Definition

A transaction allowing employees to sell vested shares or exercise and sell options.

Here “Employee liquidity” means: A transaction allowing employees to sell vested shares or exercise and sell options.

Pitch context

You will see “Employee liquidity” in fundraising decks, data rooms, term sheets and investor conversations when the discussion reaches exits, liquidity & investor returns.

Why it matters: In exits, liquidity & investor returns, a loose definition can change rights, obligations, approval, disclosure or enforceability.

Caution

Meaning, enforceability and required process vary by jurisdiction and agreement; this definition is not legal advice.

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Sources & evidence · 6

Direct term-level sources and supporting source families.