Private Companies Creating Their Own Market
Charly Kevers, CFO at Carta, on progressive price discovery and investor relations
This is a control advantage, not just a liquidity feature. By deciding which investors can see the offering, how often trading happens, and how much information is shared, a late stage private company can manufacture some of the benefits of a public market without giving up its cap table or broadcasting sensitive operating data to everyone. That turns secondary liquidity into a tool for recruiting, pricing, and investor selection.
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In practice, creating your own market means running issuer approved auctions or tenders for a handpicked group of buyers, often top institutions or crossover funds, instead of letting brokers shop shares broadly. That keeps new names off the cap table unless the company wants them there, and reduces the information leakage that came with older private secondary markets.
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The strategic payoff is better price discovery on the company’s terms. If shares trade quarterly instead of only at the last primary round, the CFO gets a fresher reference price for recruiting offers, M&A conversations, debt with warrants, and bringing in pre IPO investors without issuing new shares and diluting everyone.
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This model sits between classic tender offers and open marketplaces like Forge or EquityZen. Tender offers give companies control but are episodic and labor intensive. Open marketplaces can move faster, but historically created messy cap tables, broker fees, and weak issuer control. Carta’s edge is that its cap table system is already the system of record, so it can pair liquidity with transfer, tax, and ownership data in one workflow.
The direction of travel is toward more private companies acting like mini exchanges for their own stock. As these programs mature, the winners will be the companies that use controlled trading to steadily train employees, attract the right institutions, and build a real pricing history before an IPO or direct listing.