What is a liquidity event? Why do firms that take money from investors strive to find a liquidity event within a 5–7 year time frame? In your judgment, did Justin’s have a favorable exit (or liquidity event)?

Explain your answer.

After graduating from college in 2000, Justin Gold spent a year in California before settling in Boulder, CO. He waited tables to pay the rent, and enjoyed outdoor activities including hiking, climbing, and exploring. Gold was a vegetarian, and to get the protein he needed he started eating a lot of peanut butter and nut butter. He owned a food processor and found that making peanut butter was easy. To spice things up he started making different flavors of peanut butter by adding ingredients such as honey, cinnamon, dried blueberries, and banana chips. The whole idea was to create something for him to eat. Gold’s roommates loved the stuff, and kept stealing it from the refrigerator. To discourage the thievery, Gold, in a good-natured way, scrawled his first name—Justin’s—

across each jar.