Competitive Advantage Over Public Companies
Alessandro Chesser, former VP of Sales at Carta, on the dynamics of CartaX auctions and preparing for liquidity
Regular private liquidity turns equity from a recruiting promise into a cashable benefit, while letting management keep tighter control over disclosure, trading windows, and buyer selection than a public company can. The edge is not just happier employees. It is a company that can pay less cash than a public rival, still compete for talent, and gather real market pricing without surrendering the cap table to whoever shows up on the exchange.
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Public companies give employees liquid stock every day, but they also accept constant price pressure and open shareholder turnover. A recurring private auction aims to copy the useful part, employee liquidity and market pricing, without the full burden of public market scrutiny.
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Against other private companies, the advantage is more concrete. Employees can sell a slice of vested stock on a known cadence, which makes startup equity feel less like a lottery ticket. That can materially narrow the compensation gap with companies like Facebook and Google.
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The strategic benefit also extends beyond hiring. Quarterly or periodic auctions give CFOs a current market price they can use in fundraising, debt with warrants, M&A discussions, and pre IPO investor preparation. Spotify used recurring secondary trading and regular shareholder disclosures to build toward a smoother direct listing.
If this model keeps spreading, the late stage private company starts to look less like a waiting room before IPO and more like a new corporate form. The winners will be companies that use controlled liquidity to recruit like a public company, operate like a private company, and enter the public markets only when that step adds something new.