Companies Must Manage Secondaries

The key point is that private stock trading becomes a company problem even when the company tries to ignore it. Employees, founders, and early investors eventually need cash for taxes, diversification, or life events, so trades get arranged through brokers, funds, and side deals anyway. CartaX was built around the idea that if the cap table system of record also handles those transfers, companies can keep control over who buys, what gets disclosed, and how the ledger stays clean.

• Most private share volume has historically happened outside issuer run programs. The market was about $30B a year by 2020, but still mostly broker driven, with handshake deals, emails, and manual approvals. That is why companies can dislike secondaries in theory and still find them showing up on their cap table in practice.
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• The company pain is very concrete. Unapproved trades can add unknown buyers, trigger repetitive ROFR and legal work, and leak information as sellers try to help buyers price the stock. Carta’s advantage was that a cap table platform can automate restrictions, invite approved sellers, transfer shares, and update ownership records in one workflow.
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• Employees are usually the last group to get orderly liquidity. Across tender data, employee sales become significant only at later valuations, while founders and investors sell earlier. Closed tenders also often price at or below the last round, which explains why workers still look for off platform liquidity when they need cash and do not trust the company process to give a fair price.
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The market is moving toward more structured, issuer approved liquidity, not less. The winners will be the platforms that let companies permit regular secondary sales without turning private stock into a free for all. That means more recurring tenders, more controlled buyer lists, and more software sitting between the broker market and the cap table.