Issuer-Controlled Auctions for Price Discovery
James McGillicuddy, head of strategy at Carta, on building an issuer-centric platform and investing in secondaries
The core bet was that private markets become more trustworthy when price is set by a structured auction instead of a one off negotiation. In practice that means buyers and sellers both submit orders, the trade clears at one market price, and the company controls who participates, how much can trade, and what gets disclosed. That is what makes the price feel fair to investors, useful to employees, and safer for issuers than brokered block trades or tender offers tied to a stale round price.
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Tender offers are controlled, but they usually start from a company chosen price, often tied to the last primary round. That makes them slow and often weak at matching real demand, which is why employees frequently pass if they think the company has outgrown that price.
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The issuer centric design is the other half of the fairness claim. Companies choose the buyer whitelist, sale limits, event cadence, and disclosure package, so price discovery happens without letting random investors force themselves onto the cap table or forcing the company into full public market exposure.
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This is also why CartaX sat in a different category from Forge or EquityZen. Those platforms are closer to marketplaces for smaller, ad hoc blocks. CartaX and Nasdaq Private Market were built more like company run liquidity programs where the issuer sets the rules and uses the auction as a governance tool.
The longer term implication is that private companies keep moving toward a hybrid model, still private in control and disclosure, but more market priced between rounds. The winners will be the platforms that can give companies recurring liquidity and credible price signals without breaking trust, because trust is what turns a cap table into a real market.