Business Model Trumps Tech in Secondaries
Hari Raghavan, ex-COO of Forge, on late-stage investing and facilitating secondary sales
The real moat in private stock trading is not better code, it is getting companies, employees, investors, lawyers, and regulators to accept the same workflow. In secondaries, the hard part is not showing bids on a screen. It is winning permission, handling transfer rules that differ by company, and giving each side enough trust to complete a sale. That makes business model design, who the customer is, who gets paid, and who controls the process, more important than pure software automation.
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Forge was built as a marketplace for pre-IPO stock, but even in 2020 Hari described most volume as still happening off platform, through brokers, VCs, and company introductions. That shows the bottleneck was market structure and stakeholder coordination, not lack of matching software.
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Platform positioning follows customer choice more than product code. Hari framed Carta as issuer centric because its core customer is the company, while Forge and SharesPost looked more like prime brokers serving buyers and sellers. The business model determines what each platform can offer without upsetting its base.
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Other operators in the category make the same point in different words. EquityZen describes fragmentation and rent seeking intermediaries as the biggest drag on liquidity, and Carta liquidity discussions center on trust, issuer cooperation, and product alignment. The market needs rule setting and relationship management before it needs an exchange style interface.
The next phase of private markets will be won by firms that turn messy one off transactions into repeatable programs that companies actually endorse. Software will still matter, but mostly as plumbing. The biggest upside sits with platforms that standardize approvals, custody, tax handling, and distribution, and make regular liquidity feel normal instead of exceptional.