Thought Leadership Enables Private Derivatives
Javier Avalos, co-founder and CEO of Caplight, on building synthetic derivatives of private stock
Thought leadership is market infrastructure in private stock, because better research makes an opaque asset class easier to price, hedge, and eventually broaden beyond insiders. Caplight is building derivatives on top of private shares, but derivatives only work when both sides have some shared view of what the company is worth. That is why research, pricing data, and company level transparency sit upstream of trading volume, not beside it.
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Caplight started with institutions because they already have more tools to judge private company value, and it explicitly saw outside research as one way to narrow the information gap before serving retail. In plain terms, research helps a buyer decide whether a Stripe or SpaceX contract is cheap or expensive before trading it.
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The underlying market has long been fragmented, broker driven, and prone to failed trades, wide spreads, and uneven information. Earlier private stock venues showed what happens without good transparency, wild pricing, thin trading, and mistrust from issuers. Research acts like a partial substitute for public market disclosures in that environment.
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Comparable players attack the same problem from different angles. Carta organizes the cap table and share transfers. Zanbato aggregates broker pricing and demand data. Caplight adds hedging and synthetic exposure. Research fills the missing layer that explains business performance, so market participants can turn raw price signals into an actual investment view.
The next phase of private markets looks more like public markets, with a data layer, research layer, broker tools, and then derivatives and structured products on top. As more companies stay private longer and more investors want exposure without holding the actual shares, the winners will be the firms that make private stock legible enough to trade with confidence.