Pre-IPO Tokenization Circumvents Issuers

The main point is that issuer approval is helpful, but not required for private stock exposure to trade. In this market, buyers and sellers keep finding ways to move risk anyway, usually through SPVs that sit between the company and the end investor. Tokenization does not change that basic fact. It turns a slow, paper heavy secondary deal into a tradable wrapper, while leaving the underlying issuer relationship mostly unchanged.

• Traditional secondaries already proved that company resistance rarely stops trading, it mostly pushes it into less transparent channels. EquityZen describes the market shifting from broad issuer opposition toward more managed participation, in part because blocking liquidity outright drove deals into forward contracts and other harder to supervise structures.
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• What tokenized platforms are really selling is economic exposure, not a direct place on the cap table. PreStocks and Jarsy both use SPVs to hold the shares, then issue tokens tied to that SPV exposure, so the company sees one shareholder of record while end users trade small slices with much lower minimums and faster settlement.
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• The competitive split is becoming clearer. Issuer aligned platforms like EquityZen build trust, get onto cap tables, and standardize access with company cooperation. Tokenized platforms optimize for broader access and 24 7 trading without waiting for that cooperation. Monark argues the end state for larger brokerages will still favor centralized custody and compliance pipes, not fully decentralized markets.
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Going forward, the winning model is likely a more explicit middle ground. Private companies will keep demanding control, while investors will keep demanding liquidity and lower minimums. That pulls the market toward structures where issuers tolerate a single compliant shareholder of record, and platforms compete on distribution, transparency, and investor experience layered on top.