How to Develop a Private Securities Marketplace

Over the past decade, private investing has become more mainstream, yet the process behind it still feels outdated and disconnected. Deals move slowly, and records often sit in spreadsheets that rarely stay accurate. For many investors and founders, the experience feels unnecessarily complicated and sometimes even limiting. 

That is why private securities marketplaces are becoming the preferred choice, because they introduce structured automated onboarding and real-time portfolio visibility. These platforms also enable controlled secondary trading, role-based access, and built-in compliance checks that would otherwise take weeks to complete manually.

We’ve developed numerous private securities solutions over the years using advanced technologies like access management systems and RegTech engines. Leveraging our expertise in this space, we’re sharing this blog to walk you through what it takes to build a private securities marketplace from the ground up. Let’s get started.

Key Market Takeaways for Private Securities Marketplaces

According to EY, the private markets have become a major force in global investing, now estimated at more than $24 trillion and projected to approach $30 trillion over the next decade. Investors continue allocating capital to private equity, private credit, and real assets in search of returns and diversification. The investor base is also expanding as access moves beyond traditional institutions to include wealth advisers and retirement plans, supported by improving exit options and a more active secondary market.

Source: EY

As more companies remain private for longer periods, private securities marketplaces are stepping in to provide liquidity and transparency. 

These platforms help employees, founders, and early investors sell shares to qualified buyers while allowing companies to maintain control over their ownership structure. With standardized compliance and technology-driven processes, marketplaces are making secondary transactions more efficient and offering better price discovery than the fragmented private trading environment of the past.

Several platforms are shaping this evolution. Forge Global has reported more than $12 billion in lifetime trading volume and offers both direct transactions and access to pooled investments for late-stage companies. 

Nasdaq Private Market supports issuers with institutional software for tender offers and buybacks. Meanwhile, partnerships like the collaboration between Blue Owl Capital and Voya Financial are beginning to move private market strategies into workplace retirement plans. 

What Is a Private Securities Marketplace?

A private securities marketplace is a financial technology platform that connects private companies, existing shareholders, and qualified investors to enable compliant secondary trading of private securities. Its purpose is to streamline transactions that would otherwise require manual legal processes, lengthy negotiations, and limited access to potential buyers.

In simple terms, it brings liquidity to private markets where selling shares has traditionally been difficult, slow, and limited to personal networks or broker connections.

How It Differs from Public Stock Exchanges

A Private Securities Marketplace is not just a smaller version of a public exchange. The structure, rules, and user experience are fundamentally different because the securities and participants are different.

Public exchanges focus on scale, liquidity, and transparency. Private marketplaces focus on compliance, authorization, and controlled access to protect non-public information and regulatory obligations.

Types of Private Securities Marketplaces

Private marketplaces come in several formats depending on who controls the platform, what assets are offered, and how trading is structured.

1. Single-Issuer Liquidity Platforms

These platforms are built for one company and exist to help its employees and early investors sell shares in a structured way. Trading windows are controlled by the issuer, and buyers are pre-approved.

• Purpose: Company-guided employee and investor liquidity
• Common Use Case: Tender offers or planned sale events

Example: Palantir Access was an early example of a single-issuer platform that helped employees gain liquidity prior to IPO.

2. Multi-Issuer Marketplaces

These platforms host shares from many private companies at once. They operate more like curated private exchanges, where buyers can browse multiple investment opportunities and sellers gain exposure to a broader pool of interested investors.

• Purpose: Aggregated supply and demand across many issuers
• Common Use Case: Pre-IPO investing and shareholder exits across multiple companies

Example: Forge Global operates a large-scale multi-issuer marketplace offering shares in companies such as Stripe, SpaceX, and others.

3. Broker-Assisted Secondary Platforms

These marketplaces combine technology with traditional investment banking or broker-dealer services. They handle complex or large block transactions, ensure compliance, negotiate pricing, and coordinate legal reviews.

• Purpose: High-touch execution with regulatory oversight
• Common Use Case: Institutional block trades or company-led liquidity programs

Example: Nasdaq Private Market often operates in this capacity, especially when the transaction requires extensive legal and regulatory coordination.

4. Tokenized or Blockchain-Based Marketplaces

In this model, ownership of a private security is represented as a digital token. Compliance rules can be embedded directly into the technology, allowing automated enforcement of transfer restrictions, accreditation checks, and fractional ownership.

• Purpose: Faster settlement, programmable compliance, and asset digitization
• Common Use Case: Trading tokenized private equity, funds, or alternative assets

Example: tZERO is one of the leading platforms advancing blockchain-based digital securities and compliant tokenized trading.

How a Private Securities Marketplace Works?

A private securities marketplace lets verified investors and approved companies trade private shares in a controlled digital environment. The platform will handle onboarding, compliance checks, price matching, and settlement so trades remain secure and accurate.

It feels simple on the surface, but underneath it runs advanced identity verification, transfer rules, and automated record updates that keep everything compliant and fast.

Step 1: Onboarding & Access Control

Everything begins with verification.

For Investors

Investors create an account and verify their identity through integrated KYC/AML services such as Trulioo or LexisNexis. The system also confirms whether they qualify as an Accredited Investor under SEC guidelines. Without this approval, trading access is not granted.

For Issuers

Companies list their securities and connect their official cap-table platform such as Carta or Pulley. This connection defines rules including transfer restrictions, eligibility criteria, Right of First Refusal (ROFR), and who can participate in trading.

Step 2: Creating Liquidity Events

Private markets typically do not operate continuous trading sessions like a public exchange. Liquidity is created through structured events.

Examples include:

• An employee or early investor choosing to sell vested shares
• A company-led tender offer with a defined selling window
• A seller posting shares with a minimum price, or issuing a Request for Quote

These mechanisms create controlled supply and qualified demand.

Step 3: Compliance as the Gatekeeper

Before a transaction can proceed, the platform performs a real-time compliance review. The automated compliance engine checks:

• Investor accreditation and identity status
• Regulatory requirements, such as SEC Rule 144 holding periods
• Issuer-specific transfer restrictions
• Whether ROFR rights must be offered to the company or existing shareholders

A trade cannot advance until these conditions are satisfied.

Step 4: Price Discovery & Order Matching

Once compliance is cleared, the system works to determine pricing and match orders.

Pricing may occur through:

• An auction, where buyers submit bids during a set time window
• An RFQ, where the seller reviews and selects from competing offers
• A guided fair market valuation reference based on comparable transactions, funding rounds, and marketplace data

This step ensures an informed and transparent pricing process.

Step 5: Execution & Settlement

After both parties agree to the terms, the trade is executed and settlement occurs.

• The buyer’s funds are moved to a secure escrow provider such as Stripe Treasury or Prime Trust.
• Legal ownership of the shares is transferred to the buyer.
• The platform updates the issuer’s cap table via API in real time, ensuring records remain accurate and compliant.
• The funds are released from escrow to the seller once ownership is confirmed.

Blockchain-enabled platforms may complete these steps through smart contracts, resulting in near-instant atomic settlement.

Step 6: Post-Trade Recordkeeping

Once the transaction closes, several follow-up tasks ensure accurate reporting and compliance.

• The transaction record is logged permanently for auditing.
• Both parties receive confirmations and updated portfolio statements.
• The platform updates valuation models using the latest trade data, improving future pricing accuracy.

How to Develop a Private Securities Marketplace?

Building a private securities marketplace is very different from building a standard trading or fintech app. It requires regulatory alignment, accurate ownership data, and tightly controlled trading workflows. When we build these platforms for clients, we follow a structured process to ensure the system is compliant, scalable, and ready for real-world use.

1. Compliance Setup

We start by designing the compliance and identity framework so that only verified and eligible investors can access the marketplace. This includes accreditation checks, global KYC and AML screening, and automated fraud detection, while also determining whether the platform will operate under an ATS, MTF, or exempt dealer model based on jurisdiction.

2. Ownership Sync

Next, we connect the marketplace to cap table systems like Carta, Pulley, or Capdesk to ensure ownership data stays synchronized. At this stage, we model vesting schedules, lockups, share classes, and restrictions, and implement validation rules that verify every transaction before execution.

3. Trading Layer

With ownership logic in place, we build the core trading experience including workflows like RFQs, matched bargains, or auction windows. Pricing rules are configured for illiquid assets, and access controls determine who can view or participate in specific trades based on role and eligibility.

4. Settlement System

Once trading is ready, we implement the settlement infrastructure to handle secure payments and asset transfer. This may include bank integrations, tokenized fiat, or escrow-based flows, and we enforce Delivery versus Payment so both sides settle securely without counterparty exposure.

5. Security & Governance

Finally, we built the governance and security framework to protect all user and issuer data. This includes multi-tenant architecture, strict access controls, encrypted storage, and full audit trails so regulators and participants have transparency without compromising privacy or security.

Most Successful Business Models for Private Securities Marketplaces

Private securities marketplaces have shifted from simple matching engines into full-stack financial infrastructure. Instead of relying on a single revenue stream, leading platforms now combine trading economics, enterprise software pricing, advisory fees, and data products to create diversified and defensible business models. 

1. Transaction Fees

Most private securities marketplaces charge fees when a transaction closes. Fees are commonly taken from both buyer and seller and are structured as a percentage of the trade value. Typical ranges are 1–5 percent per side, depending on deal size, counterparty profile, and whether the transaction involves advisory support.

Why it works: This model directly ties revenue to liquidity. Higher volume means more revenue, creating a clear incentive to reduce friction and grow order flow.

Example Estimate:

Using Forge Global’s reported 2.5 billion dollars in 2021 transaction volume:

• Take rate assumption: 2 percent seller + 1 percent buyer = 3 percent
• Estimated revenue: 2.5B × 3% ≈ 75M

Nasdaq Private Market uses a similar structure, especially in tender offers where a single program can generate seven-figure fees.

2. SaaS Subscription Fees

Companies and financial institutions pay recurring fees to access marketplace software including cap table management, investor dashboards, compliance workflows, trading tools, and liquidity program administration.

This converts episodic trading revenue into predictable annual recurring revenue.

Example Model:

Estimated recurring SaaS revenue: ~$19.5M annually

Carta’s evolution from cap table SaaS to liquidity infrastructure is one of the clearest validations of this model.

3. Broker-Dealer Commissions

Many platforms maintain registered broker-dealer arms to handle negotiated transactions, block trades, or structured tender offers. These deals require human advisory services and resemble traditional investment banking.

Commission rates typically range from 3–6 percent of transaction value.

Example Estimate:

• Annual advised volume: 500 million dollars
• Average take rate: 4 percent

Estimated revenue: 20M annually

This model performs best when serving late-stage companies preparing for structured liquidity events.

4. Data and Analytics

Marketplace activity generates proprietary datasets such as valuation trends, secondary pricing behavior, investor demand signals, and company-specific liquidity patterns. Institutions are willing to pay for access because private market pricing is otherwise opaque.

Typical pricing structure:

• Institutional data licenses: 100K–500K per year
• Custom research reports: 5K–25K per report
• Real-time API access: 10K–50K per month

Potential annual contribution: 10M to 50M+, depending on data depth and client base.

This model mirrors firms like PitchBook and CB Insights, which have proven that private market intelligence can scale into the hundreds of millions in subscription revenue.

The $1.6T Private Credit Boom Is Accelerating Private Security Marketplaces

The private credit market has now crossed 1.6 trillion dollars in assets, and that scale is forcing the industry to evolve. As private credit secondaries become material, investors will inevitably demand faster price discovery and easier exits instead of slow one-to-one negotiations. That shift is accelerating the need for private securities marketplaces because technology can finally match the volume, complexity, and liquidity expectations shaping this asset class.

Private Credit Is No Longer an Alternative

Private credit refers to non-bank lenders issuing loans directly to companies. A decade ago, this was a side strategy. Today, it is one of the fastest-expanding capital sources globally, driven by three forces:

• Regulation reshaped lending. After the 2008 crisis, banks were constrained by capital rules that made many corporate loans unattractive.
• Institutional investors needed yield. Pensions, insurers, and endowments grew frustrated with shrinking bond returns and poured capital into private credit.
• Borrowers wanted flexibility. Mid-market companies realized they could get bespoke terms and faster execution from private lenders than from traditional banks.

Once a market reaches this size, illiquidity stops being a feature and becomes a bottleneck. That is where marketplaces enter the equation.

The Liquidity Chain Reaction

Most private credit capital sits in closed-ended vehicles with lockups that stretch seven to ten years. That works in theory until an LP needs to:

• Rebalance exposures
• Meet capital calls
• Exit early due to strategy or policy shifts

Historically, their path was slow, opaque, and relationship-driven. With a multi-trillion-dollar ecosystem now built on illiquid positions, the demand for early liquidity is no longer occasional; it is structural.

This demand is fueling rapid growth in the private credit secondaries market, where stakes in funds and portfolios of loans are traded much like private equity interests.

The challenge is that today’s tools, mostly spreadsheets, emails, and manual negotiation, cannot handle the scale or speed this market now requires. A marketplace model has become the logical solution.

How Private Credit Fuels Marketplace Growth

1. Scale Requires Infrastructure

You cannot efficiently manage a trillion-dollar asset class with million-dollar technology. The manual processes of due diligence, negotiation, and settlement that once sufficed are now breaking down. A digital marketplace provides the necessary infrastructure to scale, offering:

• Standardized Deal Rooms: Secure data rooms for sharing sensitive loan portfolios.
• Automated Workflows: Streamlining the immense legal and compliance checks.
• Broader Investor Reach: Connecting a global pool of specialized buyers with sellers they would never find otherwise..

2. Transparency Becomes a Competitive Advantage

Private credit pricing is not marked to market. Valuations rely on internal models, private documentation, and negotiated assumptions. A marketplace changes that dynamic.

By aggregating bids, executed trades, and historical pricing, it creates the closest this market has ever had to real price discovery. Over time, that dataset becomes an asset in its own right.

3. Investors Want Precision, Not Just Exposure

Private credit has splintered into direct lending, venture debt, asset-backed strategies, distressed credit, specialty finance, and more.

Marketplaces give investors the ability to:

• Adjust exposure by strategy
• Respond to macro conditions
• Build dynamic portfolios rather than static allocations

Private markets begin to behave more like adaptable portfolio components rather than locked capital.

Common Challenges of a Private Securities Marketplace

After building platforms like these for multiple clients, we’ve noticed a consistent pattern: the same four challenges appear in every project, regardless of geography, regulatory environment, or business model. The difference between a platform that scales and one that collapses is how these challenges are handled at the architectural level, not as afterthoughts.

At Idea Usher, we’ve helped innovators reshape private equity infrastructure, and these are the hurdles that repeatedly determine success.

1. Challenge: Cap Table Fragmentation

In private markets, ownership isn’t static. A single trade can create discrepancies between the marketplace ledger, third-party cap table tools like Carta or Pulley, and the official legal registry. When these systems drift out of sync, the result is more than confusion. It opens the door to compliance failures, legal disputes, and stakeholder distrust.

How We Solve It:

Instead of treating integration as a one-way export, we build a shared ownership model across systems. With real-time sync and auditability built in, every executed trade automatically updates the official cap table. No manual reconciliation, no lag, no guesswork. The marketplace becomes a legally reliable source of truth, not a parallel record.

2. Challenge: Regulatory Complexity Across Jurisdictions

Private security rules vary by country, state, and sometimes even by issuer. SEC exemptions, Blue Sky laws, AML frameworks, accreditation rules, and internal shareholder agreements all have to be honored consistently and instantly. Doing this manually simply doesn’t scale.

How We Solve It: 

We embed compliance directly into the transaction workflow. Every trade passes through a rule stack that adapts to the specific context:

• Jurisdictional and cross-border regulations
• Shareholder agreements and transfer restrictions
• KYC, AML, and accreditation requirements

This transforms compliance into an automated, enforceable layer. It is always present but rarely interrupts unless required.

3. Challenge: Low Liquidity and Poor Price Transparency

Unlike public markets, private securities don’t trade frequently. Without consistent order flow, price discovery becomes speculative. Buyers hesitate, sellers wait, and platforms struggle to gain traction.

How We Solve It:

Rather than relying solely on a continuous order book, we implement liquidity strategies that suit low-volume environments:

• Structured trading events such as periodic auctions or tender offers
• RFQ (Request-for-Quote) workflows that match buyers and sellers efficiently
• Data-backed valuation models using historical trades, fundraising data, and comparables

The result is clearer market transparency and increased confidence from both sides of a transaction.

4. Challenge: Security and Granular Permissioning

A private securities marketplace holds extremely sensitive information including shareholder rosters, valuations, agreements, and financial data. Any cross-issuer visibility or unauthorized access can be catastrophic for trust and compliance.

How We Solve It: 

Our platforms are built on a security model that treats every request as untrusted until proven otherwise. This includes:

• Zero-trust identity and access controls
• Strict role-based permissions
• Physical and logical issuer-level data isolation

Each issuer operates in its own secured environment while still benefiting from unified platform capabilities.

Tools & APIs to Develop a Private Securities Marketplace

Building a private securities marketplace isn’t about collecting the flashiest tech stack. It’s about selecting the right tools to support compliance, automation, security, interoperability, and scalability from day one. At Idea Usher, we don’t simply plug in APIs. We design an ecosystem where every component plays a precise role.

Below is the core stack we rely on and why each category matters.

1. Identity & Compliance

Before trading is possible, participants must be verified. This isn’t optional. It’s the backbone of regulatory trust.

Tools We Use: LexisNexis, Persona, Sumsub, Trulioo (global KYC/AML and accreditation checks), Plaid (identity and income verification)

Why It Matters: These tools allow us to automate investor onboarding while meeting SEC, FATF, MiFID, and jurisdiction-specific requirements. What previously took days of manual document review now happens in minutes without sacrificing accuracy. Compliance becomes embedded in the workflow rather than a barrier to participation.

2. Cap Table & Issuer Data

A marketplace cannot function in isolation from official equity records. Any gap between marketplace trades and issuer cap tables creates legal and operational chaos.

APIs Used: Carta, Pulley, Captable.io, KoreConX

Why It Matters: We build real-time, bi-directional syncing rather than basic data imports. Every executed trade updates the issuer’s official cap table automatically. This eliminates reconciliation work, prevents share ownership conflicts, and builds credibility with issuers who expect their records to remain accurate without manual intervention.

3. Smart Contract & Ledger

Ledger selection determines settlement speed, transparency, and auditability. It also defines how securities are issued, tokenized, and controlled.

Frameworks Implemented:

• Hyperledger Fabric: Permissioned, enterprise-grade, strong privacy and identity controls
• Polygon Permissioned Chain: Ethereum-compatible with scalability and controlled access
• Ethereum with Compliance Wrappers: Public ecosystem with rule-enforced smart contracts

Why It Matters: With the right ledger approach, settlement can be near-instant (T+0) rather than taking weeks. Smart contracts automatically enforce transfer restrictions, whitelisting, lockups, and ownership logic. This creates transparency without exposing confidential issuer data.

4. Payments & Escrow

Trading securities requires secure, compliant money movement and safeguarded custody. You’re not just processing payments; you’re managing regulated escrow and asset custody.

Solutions Integrated:

• Stripe Treasury for escrow, fund flow automation, and regulated banking rails
• Fireblocks, Anchorage Digital for secure custody of tokenized assets
• Prime Trust / Plaid for ACH and wires for seamless fiat handling

Why It Matters: This setup protects investor funds, supports multi-asset workflows, and resolves counterparty risk. It also ensures compliance with custodial and escrow obligations expected in regulated financial environments.

5. The Core Development Architecture

All of this must live on a resilient, secure platform that scales without breaking.

Our Architectural Principles:

• Microservices: Each module (trading, onboarding, compliance, cap table sync) runs independently and scales separately
• RBAC (Role-Based Access Control): Every user sees only what they’re allowed to see
• Encryption Vaults: Sensitive identity, financial, and equity data is encrypted in transit and at rest

Why It Matters: This approach avoids single points of failure, simplifies compliance audits, and ensures long-term flexibility as regulations and business models evolve.

Top 5 Private Securities Marketplaces in the USA

We spent time researching the private secondary space, and we found a few platforms that offer interesting models for trading private company equity. Each one approaches liquidity with its own technology stack and workflow that might appeal to different investor or issuer needs.

1. Forge Global

Forge Global is considered one of the most active private share marketplaces in the United States and focuses on connecting accredited investors with employees or early shareholders seeking liquidity before an IPO. Investors often use it to access well-known late-stage private companies because it offers scale, historical pricing data, and standardized transaction models.

2. EquityZen 

EquityZen specializes in secondary trading for accredited investors who want exposure to private growth-stage companies. The platform may feel simple to a seller, but behind the scenes, it handles onboarding, regulatory checks, deal structuring, and secure settlement to keep trades compliant and efficient.

3. Nasdaq Private Market

Nasdaq Private Market operates more like an institution-grade liquidity infrastructure than a standard retail marketplace, and it supports company-sponsored events such as tender offers or structured trading windows. The platform is used by late-stage private companies that want liquidity without losing control of who can buy or sell.

4. Securitize

Securitize runs a regulated private securities platform that uses blockchain records to represent ownership and settlement instructions, enabling investors to trade tokenized equity or alternative assets. The platform automates identity verification, transfer restrictions, and record updates, making it suitable for digital private markets.

5. Linqto

Linqto gives accredited investors access to private company equity in a way that feels closer to a curated investment marketplace. The platform sources investment opportunities, verifies eligibility, and handles transaction workflows through a streamlined app experience. It is designed so that private equity exposure becomes more accessible without changing regulatory requirements.

Conclusion

The demand for liquidity, automation, and scalable digital trading is rising fast as private markets mature and investors expect smoother access and secure transactions. Modern private securities platforms must blend regulatory intelligence, robust fintech architecture, accurate cap table logic, and strong security governance. Idea Usher can serve as the partner that designs, builds, integrates, and supports these systems so clients can scale confidently and meet market expectations with enterprise-grade technology.

Looking to Develop a Private Securities Marketplace?

Idea Usher can help you to develop a private securities marketplace by providing end-to-end development, from architecture to deployment. Our team ensures compliance integration, secure transactions, investor onboarding, and automated workflows. We also offer UI/UX design, real-time dashboards, smart contracts, and ongoing support for smooth platform operation.

Why partner with us?

• 500,000+ hours of coding expertise.
• Ex-MAANG/FAANG developers who thrive on complex fintech challenges.
• We build the core pillars: Automated Compliance, Price Discovery, & Atomic Settlement.

We don’t just code; we architect financial infrastructure. See the proof in our latest projects, and let’s build what’s next.

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