--- title: "Liquidity Event, Definition | MedTech Terms" description: "Any transaction that converts illiquid private-company equity into cash or freely tradable securities, typically IPO, M&A, or secondary tender." lang: en json-ld: | { "@context": "https://schema.org", "@graph": [ { "@type": "DefinedTerm", "@id": "https://medtechterms.com/terms/liquidity-event#term", "name": "Liquidity Event", "description": "A liquidity event is any transaction that converts illiquid private-company equity into cash or freely tradable public securities. The three primary forms in MedTech are: an IPO, an acquisition (M&A), or a secondary tender offer in which existing investors (or specialized secondary funds) buy shares from earlier holders. 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[Home](/) 2. / 3. [Terms](/terms) 4. / 5. [Investment & Finance](/terms?cat=Investment%20%26%20Finance) 6. / 7. Liquidity Event [All terms](/terms) Investment & Finance [Startup Lifecycle](/ecosystems/startup-lifecycle) # Liquidity Event Any transaction that converts illiquid private-company equity into cash or freely tradable securities, typically IPO, M&A, or secondary tender. Reviewed by [Christian Espinosa, Founder, Blue Goat Cyber](/authors/christian-espinosa) Last reviewed May 9, 2026 ## Definition A liquidity event is any transaction that converts illiquid private-company equity into cash or freely tradable public securities. The three primary forms in MedTech are: an [IPO](/terms/ipo), an acquisition ( [M&A](/terms/m-and-a)), or a secondary tender offer in which existing investors (or specialized secondary funds) buy shares from earlier holders. The term often appears in vesting acceleration provisions, board approval covenants, and [409A valuation](/terms/409a-valuation) refresh triggers. ## What this means in practice MedTech median time to liquidity is significantly longer than software (commonly 8-12 years from founding) due to clinical-trial and regulatory timelines. Secondary transactions have become more common as a partial-liquidity option for long-tenured founders and employees. Common pitfalls - • Assuming a secondary tender qualifies as the 'liquidity event' under double-trigger acceleration clauses, usually it does not. ## Related terms Grouped by theme ### Editor's picks · Hand-selected related concepts [ Investment & Finance Exit Multiple Valuation ratio applied at exit, e.g., enterprise value to revenue. ](/terms/exit-multiple)[ Investment & Finance Initial Public Offering(IPO) First sale of a company's stock to public investors via a registered SEC offering, typically on NYSE or Nasdaq. ](/terms/ipo)[ Investment & Finance Mergers and Acquisitions(M&A) Transactions in which one company acquires or combines with another, the dominant MedTech exit path, typically a strategic acquisition by an established player. ](/terms/m-and-a)[ Investment & Finance Vesting Schedule Timeline over which equity is earned by an employee or founder. ](/terms/vesting) ### More in Investment & Finance · Same category [ Investment & Finance 409A Valuation An independent fair-market-value appraisal of common stock used to set tax-compliant strike prices for employee stock options. ](/terms/409a-valuation)[ Investment & Finance Anti-Dilution Protection Adjustment that protects investors if the company raises a future round at a lower price. ](/terms/anti-dilution)[ Investment & Finance Bridge Round Interim financing between priced rounds, usually convertible. ](/terms/bridge-round)[ Investment & Finance Burn Rate Rate at which a company spends cash, typically expressed monthly. ](/terms/burn-rate) Cited by Where this term appears across MedTech Terms. Ecosystems (1) - [Startup Lifecycle](/ecosystems/startup-lifecycle) ## Primary references 3 sources Link health: 3 verified · last checked 2026-06-20 NVCA· 1 IRS· 1 SVB· 1 1. [1 NVCA Model Legal Documents Verified NVCA · nvca.org ](https://nvca.org/model-legal-documents/) 2. [2 IRS, Topic 427 Stock Options Verified IRS · irs.gov ](https://www.irs.gov/taxtopics/tc427) 3. [3 Silicon Valley Bank - Healthcare Reports Verified SVB · svb.com ](https://www.svb.com/trends-insights/) Inline markers like \[1\] jump to the matching reference above. Sponsor note ### Diligencing a MedTech cybersecurity posture? Blue Goat Cyber supports investors and acquirers with cybersecurity diligence on connected MedTech assets. [Book a 30-minute discovery session](https://go.bluegoatcyber.com/meetings/blue-goat-cyber/discovery-session) - No obligation - Expert-led from minute one - NDA available on request MedTech Terms is a community resource sponsored by [Blue Goat Cyber](https://bluegoatcyber.com). Definitions are independent of any vendor. On this term Category Investment & Finance Sources 3 Updated 5/9/2026 [Compare with another term](/compare?a=liquidity-event) Learn in 60 seconds Card Lesson Quiz Any transaction that converts illiquid private-company equity into cash or freely tradable securities, typically IPO, M&A, or secondary tender. - · MedTech median time to liquidity is significantly longer than software (commonly 8-12 years from founding) due to clinical-trial and regulatory timelines. - · Secondary transactions have become more common as a partial-liquidity option for long-tenured founders and employees. - · The three primary forms in MedTech are: an IPO, an acquisition (M&A), or a secondary tender offer in which existing investors (or specialized secondary funds) buy shares from earlier holders. Remember this Watch out: Assuming a secondary tender qualifies as the 'liquidity event' under double-trigger acceleration clauses, usually it does not. Related terms - [Initial Public Offering(IPO) ](/terms/ipo) - [Mergers and Acquisitions(M&A) ](/terms/m-and-a) - [Exit Multiple ](/terms/exit-multiple) - [Vesting Schedule ](/terms/vesting) You may also need Auto-suggested from Investment & Finance and shared keywords. - [Drag-Along and Tag-Along Rights ](/terms/drag-tag-along) - [Earn-Out ](/terms/earn-out) - [Simple Agreement for Future Equity(SAFE) ](/terms/safe-note) - [Preferred Stock ](/terms/preferred-stock) - [Royalty Financing ](/terms/royalty-financing) - [Series A / B / C Financing Rounds ](/terms/series-funding) [All Investment & Finance terms](/terms?cat=Investment%20%26%20Finance) MedTech Terms An authoritative, plain-language reference for the regulatory, quality, cybersecurity, and software terms that shape modern medical devices. 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