Tender Offers Prevent Price Discovery
Alessandro Chesser, former VP of Sales at Carta, on the dynamics of CartaX auctions and preparing for liquidity
The real problem is not that sellers lack willingness to sell, it is that tender offers ask them to accept a buyer set price without a live market to test it. In a tender, the company or lead investor usually anchors price off the last round, so employees decide yes or no against a fixed number. That structure misses what different sellers would accept today, which is why tenders often clear below current perceived value and end up undersubscribed.
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In tender data across 64 offers and more than $3B of volume, 83% were priced at or below the last round and participation averaged 37%. Lower pricing directly correlated with lower seller participation, which shows the bottleneck was pricing, not a lack of desire for liquidity.
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An auction changes the workflow. Sellers can place limit orders at different prices, buyers do the same, and the trade clears at one market price. That means a seller who would part with 10% at one price and 20% at a higher price can express both, instead of facing a single take it or leave it offer.
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This matters beyond employee liquidity. Regular price discovery gives CFOs a current number they can use in recruiting, M&A, debt with warrants, and eventual IPO preparation. Spotify used repeated private trading and recurring disclosures to build pricing history before its direct listing.
The next step for private liquidity markets is moving from occasional company run tenders to recurring auctions with predictable cadence. As trading becomes more regular, price becomes less of a negotiation artifact from the last round and more of a living signal of supply and demand, which makes private stock more useful as compensation, acquisition currency, and a bridge to public market readiness.