Verticalization of Private Market Liquidity
Javier Avalos, co-founder and CEO of Caplight, on building synthetic derivatives of private stock
Private market liquidity is splitting into specialized products, not one universal marketplace. The same underlying activity, matching buyers and sellers in private stock, now shows up as company run tenders, employee block sales, brokered institutional trades, and derivative overlays. Each workflow favors a different owner. Carta and Nasdaq Private Market are strongest when the company wants control, Forge and similar brokers are strongest when investors want direct access, and Caplight is building around institutional price discovery and hedging.
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The market already broke into distinct lanes years ago. Company sponsored tenders became the main driver of volume, while platforms like Forge and EquityZen handled employee and investor trades, and inter broker systems like Zanbato served institutions. That structure makes vertical competition a feature of the market, not a temporary phase.
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Tender offers look simple, but simplicity is a separate product choice. They give issuers control over who sells, who buys, and how much stock moves, but often rely on last round pricing and can underprice employees. Auction style products try to fix that with better price discovery, which is why issuer control and fair pricing are now separate battlegrounds.
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Caplight sits in a different vertical from the company facing tender platforms. Its role is closer to market infrastructure for institutions and brokers, using secondary pricing data to support block trading and eventually derivatives, rather than winning the company workflow for every liquidity event.
The next phase is more bundling around each workflow. Issuer platforms will add tender operations, transfers, disclosures, and tax handling. Broker and data platforms will add execution tools, pricing, and risk products. As private companies stay private longer, the winners will be the firms that become default software for one recurring job, not the ones trying to own every form of secondary trading at once.