Fragmentation Bottleneck in Secondary Markets

The real prize in private secondaries is not finding more buyers, it is collapsing the chain between the seller and the final buyer. When employees, VCs, brokers, and nested SPVs all see different slices of the market, no one sees the true clearing price. That means slower deals, wider spreads, and more money leaking to middlemen instead of reaching shareholders or issuers.

• Private secondaries still behave more like phone based block trading than an exchange. Brokered deals, issuer approvals, ROFR workflows, and manual share transfers can stretch a transaction across months, which is why fragmented demand never turns cleanly into liquidity.
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• Different platforms optimize for different constituencies. EquityZen aggregates smaller checks through fund structures, Nasdaq Private Market and Carta optimize for issuer controlled tenders, and broker heavy networks optimize for institutional blocks. That specialization helps each niche, but splinters the overall order book.
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• SPVs solve one problem and create another. They let platforms bundle many investors into one cap table line item, but extra layers of SPVs add fees, paperwork, and opacity. Newer models like tokenized economic rights are explicitly trying to reduce those layers back toward one.
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The market is moving toward a structure where a few trusted platforms own settlement, issuer workflow, and investor aggregation all at once. As that stack tightens, private shares should trade with narrower spreads, faster execution, and cleaner price signals, which would make recurring liquidity a normal operating tool for late stage companies rather than an occasional special event.