LIQUIDITY PATH

The path taken by the owner or founder of a company to increase liquidity. Selling the company in a merger and acquisition, or making initial public offerings (IPOs) to investors are the most common liquidity paths. This aims either to cash out and relinquish the ownership or reinvest for the expansion of the company.

Without liquidity path, private firm owners cannot convert their ownership by any other means of investment or currency. Also, the owner may find it difficult to tap the value of the company he or she has built.