Early-Stage Liquidity Events

This question practices the basic idea of liquidity in private markets and how ownership in a startup can be converted into cash before a public listing or full sale. Candidates need to understand the difference between primary capital, which goes into the company, and secondary proceeds, which go to existing shareholders, as well as the role of venture investors and strategic acquirers in creating exit opportunities. Interviewers ask this because it tests whether a candidate can explain how private equity ownership works, why liquidity matters to founders and early backers, and how financing or acquisition transactions can change who receives cash.