Issuer Controlled Liquidity Programs
James McGillicuddy, head of strategy at Carta, on building an issuer-centric platform and investing in secondaries
This view makes clear that private liquidity works best as a governance tool, not as an always on trading venue. Carta’s model was built around letting a company choose who can buy, who can sell, how much can trade, and how often auctions happen, because too much day to day trading creates noise, attracts misaligned buyers, and pushes a still private company into public market behavior before it is ready.
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The practical alternative is recurring but limited auctions. CartaX was designed for quarterly or monthly windows with caps on how much employees or investors could sell, so people can get cash for real life needs without turning the cap table into a free for all market.
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The core issuer concern is control. In private markets, companies care less about maximizing trading volume and more about controlling shareholder mix, disclosure cadence, 409A impact, and administrative burden. That is why issuer centric platforms look more like structured company programs than mini stock exchanges.
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There is also a stage issue. For companies close to IPO, more frequent trading can help with price discovery and disclosure habits, as Spotify showed before direct listing. But for younger companies, too much liquidity can distract teams and expose immature businesses to pricing they are not prepared to manage.
The market is moving toward a middle ground where private companies run regular, controlled liquidity events instead of choosing between zero liquidity and full public market churn. The winners will be platforms and issuers that can deliver enough liquidity to retain employees and refresh the cap table, while keeping the company’s pace, narrative, and shareholder base firmly under issuer control.