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

Liquidity

Also called: market liquidity

ELI5

How easily an asset can become cash.

Used in conversation

“Private startup shares have limited liquidity.”

Definition

The ability to convert an asset or security into cash without excessive delay or value loss.

Here “Liquidity” means: The ability to convert an asset or security into cash without excessive delay or value loss.

Pitch context

You will see “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.

Connected terms

  • LiquidityThe same visible label “Liquidity” names different concepts.
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Sources & evidence · 6

Direct term-level sources and supporting source families.