Fragmentation Reduced Private Secondary Liquidity
The Privately-Traded Company: The $225 Billion Market for Pre-IPO Liquidity
Fragmentation kept private secondaries from becoming a real market, because every trade started almost from zero. Sellers, buyers, brokers, and issuers were split across separate venues, most trades still happened off platform, and each company imposed its own transfer rules, approval process, and disclosure standards, so even after price was agreed the deal could sit open for weeks and often die before shares moved.
-
Broker driven trading made liquidity look larger than it was. Brokers could shop the same block to many investors, but that created wide spreads, slow price discovery, and a lot of bilateral deals rather than a standing market with reliable bids and offers.
-
The leading platforms each solved a different slice of the problem. Forge and SharesPost focused on matching buyers and sellers, CartaX pushed issuer approved periodic auctions with more disclosure, and Nasdaq Private Market specialized in tenders, which meant order flow stayed split instead of pooling in one venue.
-
That is why consolidation mattered. Forge buying SharesPost combined two separate networks of sellers and institutional buyers, while newer models like ClearList tried to bypass the wait for a natural counterparty by having GTS stand in as the dealer and quote both sides continuously.
The next phase is a shift from occasional, brokered transactions to repeatable liquidity programs and market making. As more issuers standardize approvals, disclosures, and auction schedules, the private secondary market starts to look less like bespoke block trading and more like an actual asset class with tighter spreads, faster settlement, and deeper recurring demand.