Founder Liquidity Timing

Imagine having the foresight to predict the perfect moment to unlock the value of your equity. Understanding the market dynamics, investor expectations, and personal financial needs with such clarity that you can make a decision that benefits both you and your company. 

The timing of liquidity events is important. Too early, and you might leave money on the table. Too late, and market conditions or company performance could turn against you. The optimal timing balances personal financial needs, company growth stages, and market conditions.

Whether you’re considering a secondary market sale, planning for an IPO, or exploring strategic exits, we provide the data-driven analysis and strategic advice you need to make the right choices.

What is Founder Liquidity Timing?

Founder liquidity timing refers to the optimal time for startup founders to access cash from their equity stakes without exiting the company entirely. The overall market conditions and industry trends play a crucial role in determining liquidity timing. 

Note: Industries with high market demand and rapid growth potential tend to have shorter liquidity times compared to those facing regulatory hurdles or high initial investment costs.

If founders are crucial to the company’s growth and product development, it is never a bad time to ask for early liquidity. This can help them stay with the company even if they are taking a below-market salary. Founder liquidity often coincides with fundraising events, such as Series A or Series B rounds. During these stages, founders may be offered liquidity by their board of investors to de-risk their personal finances while the company continues to grow.

As the company approaches an IPO or acquisition, founders may have more opportunities for liquidity. These events provide a clear path for converting equity into cash, benefiting not only founders but also investors and employees.

Here we prepared a table  regarding the timing of founder liquidity: the data highlights the significant variations in liquidity timing across different funding types and industries. 

Last Funding Type	AVERAGE of Liquidity: Number of Years - March 2025
Angel	13.65
Convertible Note	11.53
Corporate Round	17.11
Debt Financing	25.01
Equity Crowdfunding	7.89
Grant	32.48
Non-equity Assistance	7.02
Post-IPO Debt	15.74
Post-IPO Equity	19.18
Post-IPO Secondary	33.21
Pre-Seed	4.11
Private Equity	28.63
Product Crowdfunding	25.17
Secondary Market	14.12
Seed	7.18
Series A	9.39
Series B	9.82
Series C	10.72
Series D	12.61
Series E	17.15
Series F	21.04
Series H	17.55
Undisclosed	21.68
Venture - Series Unknown	16.46
No Funding	51.59

Industry-Primary	AVERAGE of Liquidity: Number of Years - March 2025
3D Printing	55.85
3D Technology	18.29
A/B Testing	9.41
Accounting	53.91
Ad Network	6.60
Ad Retargeting	14.34
Ad Targeting	14.47
Addiction Treatment	18.74
Advanced Materials	40.63
Adventure Travel	43.36
Advertising	28.92
Advertising Platforms	10.87
Advice	43.65
Aerospace	42.85
Affiliate Marketing	3.80
Agriculture	58.92
AgTech	9.63
Air Transportation	19.37
Alternative Medicine	48.59
Alternative Protein	7.63
American Football	9.40
Analytics	23.83
Android	15.13
Angel Investment	31.29
Animal Feed	40.62
Animation	23.72
App Discovery	13.51
Apparel	55.47
Application Performance Management	10.52
Apps	16.83
Aquaculture	74.77
Architecture	48.04
Art	38.99
Artificial Intelligence (AI)	15.08
Asset Management	45.26
Assisted Living	50.93
Assistive Technology	23.42
Association	52.07
Auctions	16.53
Audio	42.66
Audio Recording and Production	75.74
Audio/Visual Equipment	39.42
Audiobooks	14.53
Augmented Reality	8.07
Auto Insurance	60.09
Automotive	58.06
Autonomous Vehicles	53.12
B2B	41.38
B2C	77.62
Baby	42.62
Bakery	48.78
Banking	58.62
Baseball	124.81
Basketball	44.86
Battery	34.49
Beauty	31.26
Big Data	19.83
Billing	41.30
Biofuel	26.99
Bioinformatics	45.88
Biomass Energy	64.67
Biometrics	4.08
Biopharma	22.80
Biotechnology	24.03
Bitcoin	24.59
Blockchain	6.04
Blogging Platforms	56.37
Boating	50.48
Bookkeeping and Payroll	26.06
Books	22.25
Brand Marketing	32.80
Brewing	67.74
Broadcasting	117.56
Browser Extensions	3.31
Building Maintenance	59.64
Building Material	62.15
Business Development	34.14
Business Information Systems	42.71
Business Intelligence	27.90
Business Process Automation (BPA)	27.32
Business Travel	70.20
CAD	37.59
Call Center	39.83
Cannabis	31.11
Carbon Capture	87.78
Career Planning	26.64
Casino	85.23
Casual Games	5.96
Catering	97.83
Charity	27.71
Chemical	53.61
Chemical Engineering	42.37
Child Care	51.59
Children	46.34
Civil Engineering	43.71
Clean Energy	28.28
Cleaning Products	70.13
CleanTech	41.30
Clinical Trials	32.44
Cloud Computing	21.27
Cloud Data Services	24.65
Cloud Infrastructure	10.51
Cloud Management	17.45
Cloud Security	23.31
Cloud Storage	14.98
CMS	18.56
Coffee	51.44
Collaboration	12.02
Collaborative Consumption	7.21
Collectibles	16.06
Collection Agency	31.09
Commercial	59.14
Commercial Insurance	57.61
Commercial Lending	26.87
Commercial Real Estate	32.58
Communication Hardware	12.62
Communications Infrastructure	24.83
Communities	47.06
Compliance	20.45
Computer	27.57
Computer Vision	46.64
Concerts	51.38
Confectionery	20.72
Console Games	17.87
Construction	51.78
Consulting	39.73
Consumer	36.73
Consumer Applications	10.20
Consumer Electronics	43.36
Consumer Goods	51.28
Consumer Lending	72.52
Consumer Research	6.16
Consumer Software	15.63
Contact Management	23.62
Content	37.45
Content Creators	9.84
Content Discovery	6.62
Content Marketing	16.45
Continuing Education	13.57
Cooking	54.68
Corporate Training	11.92
Cosmetic Surgery	53.72
Cosmetics	36.23
Craft Beer	57.08
Creative Agency	33.59
Credit	43.27
Credit Cards	18.62
CRM	26.30
Crowdfunding	23.17
Crowdsourcing	16.08
Cryptocurrency	21.70
Customer Service	58.75
Cyber Security	22.70
Dairy	98.64
Data Center	32.63
Data Center Automation	22.57
Data Collection and Labeling	27.35
Data Integration	25.61
Data Management	38.27
Data Mining	31.71
Data Storage	23.27
Database	53.42
Dating	4.33
Delivery	37.73
Delivery Service	55.09
Dental	62.46
Developer APIs	32.68
Developer Platform	37.34
Developer Tools	16.82
DevOps	12.72
Dietary Supplements	32.70
Digital Entertainment	47.88
Digital Marketing	28.19
Digital Media	32.04
Digital Signage	41.76
Direct Marketing	74.48
Direct Sales	16.70
Distillery	15.16
Document Management	41.62
Document Preparation	26.62
Drone Management	66.85
Drones	39.81
E-Commerce	30.69
E-Commerce Platforms	7.60
E-Learning	23.66
EdTech	12.20
Education	41.13
Elder Care	57.84
Elderly	72.69
Electric Vehicle	91.33
Electrical Distribution	53.63
Electronic Design Automation (EDA)	26.27
Electronic Health Record (EHR)	40.62
Electronics	45.21
Email	31.74
Email Marketing	24.13
Embedded Software	4.50
Embedded Systems	15.49
Emergency Medicine	124.86
Employee Benefits	36.26
Employment	18.81
Energy	36.25
Energy Efficiency	42.32
Enterprise	18.53
Enterprise Applications	4.12
Enterprise Resource Planning (ERP)	18.92
Enterprise Software	20.83
Environmental Consulting	37.77
Environmental Engineering	32.92
eSports	20.09
Event Management	34.67
Events	47.09
Eyewear	42.69
Facilities Support Services	61.97
Facility Management	124.75
Family	80.74
Fantasy Sports	65.53
Farming	76.11
Fashion	59.76
Fertility	39.94
Field Support	33.07
Film	56.27
Film Production	44.93
Finance	44.90
Financial Exchanges	5.84
Financial Services	43.14
FinTech	34.22
First Aid	8.45
Fitness	35.62
Fleet Management	20.25
Food and Beverage	54.76
Food Delivery	14.87
Food Processing	68.31
Food Trucks	31.28
Forestry	4.59
Foundries	70.89
Freelance	8.06
Freight Service	39.54
Fruit	124.67
Fuel	34.81
Furniture	50.80
Gamification	18.81
Gaming	21.34
Generative AI	0.91
Gift	48.80
Gift Card	5.63
Golf	49.19
Government	48.96
GovTech	13.70
GPS	12.88
Graphic Design	82.56
Green Consumer Goods	7.04
Grocery	53.80
Guides	12.01
Hardware	54.67
Health Care	44.27
Health Diagnostics	65.74
Health Insurance	85.03
Heating	81.75
Herbs and Spices	156.87
Higher Education	16.84
Hockey	124.84
Home and Garden	31.62
Home Decor	50.69
Home Health Care	30.27
Home Improvement	22.94
Home Renovation	27.95
Home Services	53.89
Horticulture	29.35
Hospital	17.64
Hospitality	32.75
Hotel	4.15
Housekeeping Service	13.07
Human Resources	29.82
Hydroponics	124.45
Identity Management	124.88
Industrial	55.86
Industrial Automation	31.01
Industrial Design	80.41
Industrial Engineering	48.87
Industrial Manufacturing	49.35
Information and Communications Technology (ICT)	21.70
Information Services	36.06
Information Technology	32.04
Infrastructure	49.16
Innovation Management	49.87
Insurance	70.60
Intelligent Systems	16.65
Interior Design	71.61
Internet	39.05
Internet of Things	12.04
Internet Radio	74.71
Intrusion Detection	29.16
iOS	5.12
ISP	23.33
IT Infrastructure	17.56
IT Management	22.16
Janitorial Service	75.80
Jewelry	124.76
Landscaping	69.47
Language Learning	32.36
Laser	124.44
Laundry and Dry-cleaning	46.74
Law Enforcement	39.27
Leasing	25.86
Legal	77.76
Leisure	28.80
Lending	30.19
Life Insurance	11.09
Lifestyle	9.27
Lighting	55.82
Local	34.56
Local Business	44.02
Location Based Services	19.50
Logistics	54.81
Machine Learning	1.84
Machinery Manufacturing	50.84
Made to Order	37.96
Management Consulting	37.74
Manufacturing	59.44
Marine Transportation	96.94
Market Research	22.50
Marketing	49.77
Marketing Automation	11.12
Marketplace	2.39
Media and Entertainment	58.13
Medical	46.91
Medical Device	29.63
Messaging	13.58
Mineral	56.12
Mining	66.47
MMO Games	23.21
Mobile	55.24
Mobile Apps	49.98
Museums and Historical Sites	62.62
Music	26.50
Natural Resources	4.44
Network Hardware	22.66
Network Security	105.02
News	79.52
Non Profit	52.01
Oil and Gas	51.76
Online Portals	14.19
Open Source	19.78
Optical Communication	125.16
Organic	124.88
Outdoors	68.78
Outsourcing	12.42
Packaging Services	75.13
Parking	80.33
Personal Health	124.49
Pet	81.79
Pharmaceutical	24.89
Photography	18.42
Physical Security	55.42
Plastics and Rubber Manufacturing	65.25
Podcast	4.38
Pollution Control	124.45
Power Grid	7.96
Precious Metals	125.03
Primary Education	8.29
Printing	44.44
Privacy	18.59
Product Design	51.45
Product Search	124.57
Productivity Tools	7.75
Professional Networking	50.59
Professional Services	52.42
Project Management	50.00
Property Development	73.88
Property Insurance	44.45
Property Management	63.85
Public Relations	11.92
Public Safety	55.35
Publishing	74.15
Quality Assurance	124.30
Railroad	50.25
Real Estate	45.92
Real Estate Investment	125.06
Real Time	125.03
Recreation	50.45
Recreational Vehicles	65.71
Recruiting	24.54
Recycling	81.75
Religion	5.71
Renewable Energy	50.86
Rental	53.30
Residential	20.61
Restaurants	125.12
Retail	70.67
Retail Technology	30.64
Retirement	125.01
SaaS	10.12
Sales	49.88
Seafood	47.01
Security	49.50
Semiconductor	13.88
SEO	67.93
Service Industry	73.69
Shipping	124.75
Shipping Broker	23.11
Smart Building	22.21
Snack Food	104.94
Soccer	6.28
Social Media	31.13
Social Media Management	6.85
Software	34.34
Solar	4.89
Sports	45.52
Staffing Agency	124.87
Supply Chain Management	15.51
Tax Consulting	124.46
Technical Support	40.43
Telecommunications	20.18
Test and Measurement	37.88
Theatre	96.63
Timber	124.46
Tourism	104.03
Training	32.25
Transportation	91.14
Travel	28.35
Universities	46.20
Vacation Rental	3.67
Venture Capital	83.42
Veterinary	124.82
Video	59.87
Video Games	124.68
Warehousing	113.16
Waste Management	43.28
Water	146.46
Wealth Management	124.63
Web Design	31.43
Web Development	2.22
Web Hosting	22.09
Wholesale	124.72
Wine And Spirits	16.58
Wireless	16.87

Source: CrunchBase (Study of around 7300 U.S based firms having exit date after March, 2024)

Founders and investors should consider these insights when planning for liquidity events to align their expectations and strategies with market realities.

Funding Type Insights

Pre-seed funding typically involves very early-stage startups. The relatively short liquidity time suggests that these companies either achieve quick exits through acquisitions or face early-stage failures.Seed-funded companies have a moderate liquidity time, indicating that they have more time to develop their products and markets compared to pre-seed companies but still face significant challenges in achieving long-term success.

Note:The stage of funding significantly impacts liquidity timing. Early-stage companies have shorter timelines, while later-stage companies, especially those post-IPO, have longer timelines due to increased market expectations and growth strategies.

Series A to F Funding Ranges from 9.39 years (Series A) to 21.04 years (Series F), Series F companies, being more mature, have a longer liquidity timeline, possibly due to higher market expectations and more complex exit strategies.As companies progress through multiple funding rounds, the liquidity time increases. This reflects the growing complexity and market expectations as companies scale.

Post-IPO companies have longer liquidity times, indicating that they are more focused on long-term growth and sustainability. Secondary market sales and post-IPO equity rounds provide additional liquidity options for founders but come with longer timelines.

Corporate Rounds and Private Equity funding types involve larger, more established companies. The longer liquidity times suggest that these companies are expected to achieve significant growth and market penetration before considering exits.

Industry Insights

Technology-driven industries, especially those focused on innovation like AI and blockchain, have varying liquidity times. Blockchain, a relatively new and rapidly evolving field, has a shorter liquidity time, indicating quicker market adoption and potential exits. The healthcare and biotechnology industries have longer liquidity times and more regulatory processes involved. These industries require significant time and capital to bring products to market and for commercial success.

Note: Different industries face unique challenges that affect liquidity timing. For example, healthcare companies must navigate complex regulatory environments, while technology companies must keep up with rapid innovation.

Consumer-facing industries have longer liquidity times, which suggests they face more market volatility and require longer periods to establish brand loyalty and market dominance. The energy and environment sectors, particularly renewable energy, have longer liquidity due to the high initial investment costs and the need for technological advancements to achieve commercial viability.

Financial services, especially FinTech, have moderate liquidity times. Venture capital, being a funding type rather than an industry, has a very long liquidity time, reflecting the high-risk, high-reward nature of the investments.

Factors to Consider

• Investor Expectations: Investors typically fund startups with the expectation of a liquidity event within 7-10 years. Founders should be aware of their investors’ time horizons and align their plans accordingly.
• Market Conditions: The timing of liquidity events can also be influenced by market conditions. For example, if the market for a particular industry is hot, it may be more advantageous to seek liquidity sooner rather than later.
• Personal Financial Needs: Founders need to balance their personal financial needs with the company’s growth trajectory. Taking too much liquidity too soon can signal to the market that the founder is not fully committed to the company’s long-term success

Smart Strategies For Founder Liquidity

When planning liquidity events, founders and investors should consider these insights to align their expectations and strategies with market realities. Early-stage companies and technology-driven industries tend to have shorter liquidity times, while late-stage companies, healthcare, and consumer industries face longer timelines. 

Eqvista can be a valuable tool for founders looking to manage their equity and plan for liquidity events effectively. By providing detailed equity tracking, compliance support, liquidity planning tools, and data-driven insights, Eqvista helps founders make decisions about the optimal timing for liquidity events. This ensures that founders can achieve their financial goals while aligning with their investors and the company’s long-term vision.