---
title: "What Is Holding Period? Private Equity Glossary"
description: "The holding period is the length of time an investor owns a company before selling it. For a private equity fund, it runs from the purchase to the exit."
url: https://capstreet.multisites.ai/glossary/holding-period
publisher: Capstreet
phone: +1-713-332-2700
contact: https://capstreet.multisites.ai/contact
---

Fundamentals

# Holding Period

The holding period is the length of time an investor owns a company before selling it. For a private equity fund, it runs from the purchase to the exit.

The holding period is how long an investor keeps its stake before it sells. For a private equity fund, it is the time between buying a company and exiting.

For example, a firm buys a company in year one, spends two years building the team and systems, adds acquisitions, and sells in year five. The holding period is four years in this simple example.

It matters to owners because it shapes what a buyer wants from you. A buyer with a medium-term plan needs growth, a strong team and a clear path to a later sale. If you stay on with [rollover equity](https://capstreet.multisites.ai/glossary/rollover-equity), the holding period is also how long your own stake is tied up.

Ask any buyer how it thinks about timing and how it plans for the next sale. Read what happens after you sell in [what to expect after you sell](https://capstreet.multisites.ai/guides/what-to-expect-after-you-sell). Related: [exit strategy](https://capstreet.multisites.ai/glossary/exit-strategy).

[Read nextWhat to expect after you sell your business to private equity](https://capstreet.multisites.ai/guides/what-to-expect-after-you-sell)

## Related terms

-   [Exit Strategy](https://capstreet.multisites.ai/glossary/exit-strategy)
-   [Rollover Equity](https://capstreet.multisites.ai/glossary/rollover-equity)
-   [Second Bite of the Apple](https://capstreet.multisites.ai/glossary/second-bite-of-the-apple)

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