Slow Trading Cadence for Private Markets
Charly Kevers, CFO at Carta, on progressive price discovery and investor relations
The core insight is that private market liquidity works best as a training wheel, not a live wire. If a company lets its stock trade too often, employees start watching the quote instead of the business, and management inherits one of public markets biggest downsides without getting all of the benefits. A slower cadence, like quarterly or semiannual auctions, still gives employees cash, gives CFOs fresher price data, and lets the company teach investors and staff how to interpret a market price before that price becomes the main event.
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Tender offers are blunt instruments. They can take months to organize, usually happen only every 12 to 18 months, and often produce weak participation because the company or a lead buyer sets one price instead of letting buyers and sellers meet in the middle. Recurring auctions are meant to reduce that one shot behavior.
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More frequent trading is useful up to a point. Quarterly programs can give a company a real market reference for recruiting, M&A, debt warrants, and eventual direct listing prep. Spotify is the model here, it paired recurring secondary trading with regular disclosures before listing, which made the jump to public markets less abrupt.
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The main tradeoff is control versus liquidity. Issuer controlled venues like Carta are built so companies can choose who buys, who sells, how much trades, and how often. More open broker driven markets like Forge and related platforms can create liquidity for individual sellers, but they give companies less control over cadence and cap table composition.
The market is heading toward a middle state between fully private and fully public. The winning model is likely to be regular but not constant trading, enough to create credible price discovery and employee liquidity, but not so much that every internal meeting turns into a referendum on the stock. That is how late stage private companies build public market muscles without importing public market noise all at once.