Silicon Valley Self Regulation

Lock-Up Period

photo by Robert S. Donovan

photo by Robert S. Donovan



A lock-up period is a defined time series when some select class of investors is not allowed to exercise shares. These are used to avoid liquidity problems while a company puts capital to work. In the tech ecosystem, lock-up periods are most common following an IPO. Lock-up periods are used in the days after an IPO to ensure that holders of the company stock don’t destabilize the new market with large liquidation events.

helpful resources

Lock-Up Period selection at Investopedia

Amy Fontinelle's What is an IPO lock-up period and how long is it? at Investopedia