Recurring Auctions Make Private Stock Credible
Charly Kevers, CFO at Carta, on progressive price discovery and investor relations
A market price turns startup equity from a story into compensation that can actually win talent. When a late stage private company can show candidates a recent clearing price from real buyers and sellers, equity stops feeling like lottery paper and starts looking like something closer to public stock, just with more upside. That same price also gives finance teams a live reference for acquisitions, debt warrants, and future fundraising, instead of leaning on a stale round price.
-
Tender offers usually fail at this job because they are anchored to the last round, not current demand. Across 64 tenders and more than $3B in volume, 83% priced at or below the last round and participation averaged 37%, which means employees often do not trust the price enough to sell.
-
The recruiting value comes from making liquidity concrete and recurring. CartaX was designed so companies can run auctions on a quarterly cadence, reuse board materials as disclosures, let employees place limit orders at different prices, and settle shares directly against the cap table at one clearing price.
-
This creates a middle ground between private and public. Companies keep control over who can buy, how much can trade, and how often auctions happen, while still building a price history that can help with direct listings, cap table refreshes, and bringing in strategic investors without issuing new shares.
The next step is more private companies behaving like lightly traded public companies before they ever list. As recurring auctions, disclosure habits, and investor communication become normal, the strongest late stage companies will use private price discovery as a recruiting weapon and as rehearsal for either a direct listing or a longer life as a controlled, liquid private company.