Operational bottleneck in private secondaries
Atish Davda, CEO of EquityZen, on the biggest bottleneck in the secondary markets
The hard part in private secondaries is not finding a buyer and seller, it is turning a messy legal handoff into a repeatable workflow. In EquityZen deals, the platform has to gather seller interest, line up many smaller investor checks, package them through an LLC fund, secure issuer approval or waiver, and move the deal through securities compliance. That operating layer is what lets EquityZen support smaller checks and accredited retail participation where brokered block trades often break down.
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EquityZen sits between open matching venues and issuer run tenders. Open marketplaces can match interest, but transfer restrictions, ROFRs, board approvals, and cap table changes still make each transaction company specific. Tender platforms solve more of that process, but are episodic and company led. EquityZen built around recurring, smaller, shareholder driven transactions.
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The fund structure is a key simplifier. Instead of every buyer landing directly on the issuer cap table, EquityZen aggregates investors into a single vehicle with EquityZen as managing member. That keeps the company from taking on dozens of tiny holders, while letting the platform drop minimums to $10,000 and serve retail sized demand.
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That is why the comparison with AngelList is limited. AngelList popularized simple SPV formation for primary deals, where the company is selling new shares into a vehicle. A secondary private placement adds a seller, transfer consent, and issuer level restrictions. The technology advantage is not a prettier marketplace, it is software that standardizes those extra approvals and documents.
The market is moving toward more software mediated liquidity, but the winners will be the platforms that turn issuer permissions, investor aggregation, and settlement into near routine operations. As private companies stay private longer, the biggest opportunity is to make a $20,000 sale feel as executable as a much larger institutional block, without losing issuer control.