An exit or liquidity event is any transaction which allows founders and investors to realise the economic value of their ownership in a company.

While the term ‘exit’ is often used in entrepreneurial discourse, it can be misleading. An ‘exit’ typically represents a change in ownership, control or capital structure which allows shareholders to convert illiquid equity into cash or more liquid assets.

For founders, exits mark the point at which years of effort, uncertainty and risk are translated into tangible outcomes.

Liquidity is a central concept in this context. Most early-stage and privately held ventures are inherently illiquid: shares cannot easily be sold and their value exists largely on paper.

Liquidity events create mechanisms through which value is realised, whether through a full sale, partial sale or public listing. Importantly, liquidity can be achieved without founders fully disengaging from the business. In many cases, leadership teams remain involved for years after an exit, particularly in acquisitions, private equity transactions and post-IPO environments.

The most common exit pathways include acquisitions, mergers, private equity buyouts and initial public offerings (IPOs).

Each pathway reflects a different strategic logic and produces distinct financial, operational and cultural outcomes for founders, employees and investors. Understanding these differences is critical, as the ‘right’ exit is highly context-dependent and shaped by the company’s characteristics, market conditions and stakeholder priorities.