Issuer-Centric Private Liquidity Infrastructure
James McGillicuddy, head of strategy at Carta, on building an issuer-centric platform and investing in secondaries
The hard part of private stock trading is not matching a buyer and seller, it is making the trade legally clean enough that the company can approve it without creating cap table chaos. CartaX was built around issuer approved liquidity, so the product had to solve transfer restrictions, ROFRs, disclosure rules, tax treatment, 409A effects, and who is allowed onto the cap table, not just build an auction screen.
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Traditional secondary brokers often found a buyer first and cleaned up the paperwork later. That created the Wild West problems companies hated, thin price discovery, random shareholders, manual certificate transfers, and months of legal work. Carta’s edge was owning the cap table ledger and transfer agent workflow, which let it automate approvals and settlement inside the company’s existing rules.
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The legal design also shaped the market design. Companies could choose who may buy, who may sell, how much can trade, how often auctions run, and what gets disclosed. That is why CartaX looked more like a recurring company run tender program than an open exchange like public stocks.
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This is also why issuer centric platforms grew differently from Forge and EquityZen. Forge and similar platforms optimized for getting individual deals done, sometimes through forwards or fund structures that worked around transfer friction. Carta and Nasdaq Private Market optimized for company approval, disclosure packages, and controlled liquidity windows.
Going forward, the winners in private liquidity are likely to look less like pure brokerages and more like infrastructure that turns legal complexity into repeatable workflow. As private companies stay private longer, the platforms that can make secondaries feel routine to CFOs, counsel, and boards will be the ones that expand the market.