How to Build a Private Share Trading Platform

Not long ago, trading private shares felt slow and disconnected because everything depended on spreadsheets and long email threads. The process worked, but it was never designed for fast decision-making or regulated digital execution. That gap pushed the rise of private share trading platforms, and the timing makes sense. Digital KYC, automated compliance logic, and secure investor onboarding now allow transactions to move with far more confidence. 

Moreover, features like secondary-market matching and role-based access help maintain control while still enabling movement. APIs connecting clearing systems and custodians ensure trades may settle with less friction and better accuracy.

Over the years, we’ve developed numerous private-market and secondary-trading solutions powered by distributed ledger systems and regtech orchestration frameworks. As IdeaUsher has this expertise, we’re writing this blog to break down the steps involved in developing a private share trading platform. Let’s get started.

Key Market Takeaways for Private Share Trading Platforms

According to GrandViewResearch, the online trading platform industry is expanding quickly, supported by broader internet access, mobile trading tools, and a growing global user base. The market was valued at roughly $9.57 billion in 2023 and is expected to reach about $15.62 billion by 2030, reflecting steady growth as more institutions and individual investors adopt digital trading tools. The push toward more accessible and diversified investment options continues to fuel this momentum.

Source: GrandViewResearch

Within that broader trend, private share trading platforms are playing a bigger role by offering access to companies that are not yet publicly traded. These platforms give investors a way to participate in the growth of venture-backed and late-stage startups, often years before a potential IPO. 

By improving transparency, compliance, and transaction workflows, marketplaces such as EquityZen and Forge Global have helped create a more organized secondary market where liquidity is no longer limited to one-off negotiated deals.

Partnerships are also shaping how fast this segment grows. One example is EquityZen’s work with large institutional investors, including Blackstone, Apollo, and KKR, which have created vehicles designed to make private market exposure more accessible to a wider pool of investors. 

What Is a Private Share Trading Platform?

A private share trading platform is a secure digital environment built specifically for buying and selling non-public securities. These may include pre-IPO equity, employee stock options, private fund interests, or other restricted assets. Unlike public exchanges such as the NYSE, participation is limited to a vetted group of investors, including institutions, qualified high-net-worth individuals, and company insiders.

These platforms are designed to address the realities of private markets, including limited liquidity, irregular pricing, regulatory restrictions, and bespoke legal agreements. To make this possible, they incorporate identity verification tools, regulatory workflow automation, and valuation logic that can adjust to assets without a live market price.

Primary vs Secondary Private Share Trading

Understanding the flow of capital is key:

• Primary Trading: The company issues new securities directly to investors. Funds raised flow to the issuing company, similar to a financing round or structured capital event.
• Secondary Trading: Existing shareholders trade with new buyers. Capital flows between investors rather than back to the company. This is often how employees, early investors, or LPs gain liquidity before a public listing or acquisition.

Most private share trading platforms are built to support secondary activity, since this is where liquidity demand is highest.

How It Differs from Public Exchanges

A private platform is not a smaller version of a public stock exchange. The operating model is fundamentally different.

Market Models: Four Common Structures

Private share trading platforms generally fall into one of four categories, each with its own control and participation model.

1. Company-Controlled Trading Portals

The issuing company operates the platform and controls access, trading windows, and eligible securities.

• Who controls it: The company
• Primary use: Managing employee equity or limited secondary liquidity
• Example use case: Quarterly employee share sale window

Real example: Carta Liquidity provides company-run liquidity programs where employees and existing investors trade under company oversight.

2. Investor-Controlled Marketplaces

These platforms are built to serve investor demand rather than company governance. Existing holders list assets, and accredited buyers place interest or bids.

• Who controls it: Investors or marketplace operators
• Use case: Transferring private shares or LP interests
• Typical users: Institutions, family offices, late-stage investors

Real example: Forge Global operates a marketplace connecting sellers of private equity with institutional demand.

3. Brokerage-Regulated Private Markets

Traditional broker-dealers extend their regulated infrastructure to private assets. The brokerage handles approvals, settlement workflows, and investor eligibility.

• Who controls it: Licensed broker-dealers
• Use case: Offering private equity access to premium or institutional clients

Real example: Morgan Stanley Shareworks combines equity management software with private market access through a regulated brokerage network.

4. Hybrid Platforms With Built-In Compliance Layers

These are the most advanced systems. They combine marketplace functionality, legal document automation, jurisdiction-specific trading rules, and settlement workflows.

• Who controls it: A regulated operator with legal and compliance orchestration
• Use case: Multi-jurisdictional trading with automated document generation, approvals, and regulatory enforcement

Real example: Platforms such as tZERO and ADDX take a hybrid approach, leveraging distributed ledger technology and regulatory licensing to automate settlement, investor eligibility, and security transfer compliance.

How Do Private Share Trading Platforms Work?

A private share trading platform verifies eligible investors first, then lets them view and trade private assets through controlled order workflows. Each order runs through automated compliance and risk checks before execution. After the match, the platform securely settles funds, updates ownership records, and preserves a full audit history.

Phase 1: Onboarding and Eligibility

Before trading is allowed, the platform must verify each participant’s identity and eligibility.

• Restricted Access: Users cannot freely register. They are invited or must apply and pass a review.
• Identity Verification: Users submit identification or business documents, which are verified through integrated tools such as Trulioo or Onfido. These systems check global watchlists, sanctions lists, and risk databases.
• Accreditation Check: Because private markets often require accredited or qualified investors, the platform verifies income, net worth, or professional certification through automated services or authorized verification partners.
• Agreement and Compliance Sign-off: The user digitally signs legal agreements, risk disclosures, and platform terms.

Only after completing these requirements does the user gain access to the trading environment.

Phase 2: Trading and Execution

Once approved, users can view investment opportunities and place orders within a controlled marketplace.

Asset Listings and Valuation: Issuers list shares or fund interests. Pricing comes from valuation models, financial reports, or third-party reviews rather than real-time feeds. Updates may occur monthly, quarterly, or after major business events.

Order Placement: Users can submit buy or sell instructions. In addition to standard limit orders, many platforms support Request-for-Quote flows where potential buyers or sellers negotiate terms before execution.

Pre-Trade Compliance and Risk Checks: Before reaching the matching engine, the order is screened to confirm trading eligibility, position limits, and regulatory restrictions. If a rule is violated, the order is blocked.

Matching or Negotiation:

• Standard trades are matched algorithmically.
• Large or illiquid trades may follow an OTC negotiation path, allowing buyers and sellers to exchange price offers before committing.

Phase 3: Settlement and Record Keeping

After a match is confirmed, the platform handles legal, financial, and administrative steps required to finalize ownership.

Execution Confirmation: Both parties are notified of the completed match, and a transaction record is generated.

Document Generation and Signing: The platform produces required agreements, such as purchase contracts, and routes them for e-signature using integrated tools like DocuSign.

Funds and Share Transfer:

• Cash is transferred through integrated banking or treasury systems and may be held in escrow.
• Equity ownership is updated in the issuer’s cap table, either through direct API integration or via a registered transfer agent.

Audit History: All actions are logged in a secure, tamper-resistant record for compliance and reporting.

Phase 4: Oversight and Monitoring

After settlement, the platform continues managing regulatory and operational responsibilities.

• Regulatory Reporting: Required reports and disclosures are generated automatically based on jurisdiction and transaction characteristics.
• Continuous Compliance Monitoring: Transactions are reviewed for irregular activity, suspicious patterns, or rule violations.
• User Portfolio Management: Participants access dashboards showing holdings, performance metrics, historical trades, and current valuations.

How to Develop a Private Share Trading Platform?

Developing a private share trading platform starts with defining the regulatory rules and access controls. Then you build the trading logic, compliance checks, and settlement workflows so the system can securely process private deals. We’ve developed several private share trading platforms over the years, and this is the workflow we follow.

1. Regulatory Planning

We start by clarifying where the platform will operate and who is allowed to access it. Together with the client, we map the platform against requirements such as SEC, FINRA, FCA, ESMA, and MiCA, then design an access governance framework that automates investor qualification and controls.

2. Trading Engine Design

Once compliance boundaries are set, we design the core trading framework and execution logic. Because private markets are often negotiation-driven, we implement workflows for RFQs, block trades, and transfers with full lifecycle governance and audit visibility.

3. Compliance & User Management

Next, we develop the identity and wallet architecture with integrated KYC, KYB, and AML checks. Multi-signature controls, escrow workflows, and custodial configurations ensure that transaction authorization and ownership are secure and compliant.

4. Valuation Infrastructure

Private assets require structured valuation processes rather than public feeds, so we build systems that support internal models and third-party valuation providers. All updates are recorded for transparency and regulatory reporting.

5. Payments & Settlement

We connect the platform to banking rails, custodians, and clearing providers while supporting optional digital ledger or tokenization layers. Automated reconciliation ensures transactions remain accurate across fiat, multi-currency, or digital settlement environments.

6. Front-End & Access Control

Finally, we design a user experience aligned to roles, permissions, and compliance status. Investor dashboards, deal rooms, document vaults, reporting tools, and workflow-based notifications help users operate with confidence.

Why Private-Market Trading Volume Grew 51% in One Year?

According to reports, in H1 2025, global private market secondary transaction volume reached USD 103 billion, a 51 percent increase from USD 68 billion in H1 2024. This surge likely reflects improved price discovery and a growing need for liquidity as investors rebalance portfolios and seek late-stage exposure with less early-stage risk. Better infrastructure and data transparency finally made these transactions feel efficient enough to scale.

1. The Liquidity Squeeze Finally Burst

For more than a decade, private companies pushed the “stay private longer” model. The result was massive valuation growth paired with a lack of liquidity.

Employees at companies like SpaceX, Stripe, and Databricks became wealthy on paper, while founders, early VC funds, and limited partners watched value accumulate without a path to realize it.

The secondary market became the release valve.

• Employees can now sell portions of their equity rather than waiting for an uncertain IPO timeline
• Early investors can return capital to LPs on a reasonable schedule
• Tender offers have shifted from rare exceptions to standard practice

Once a few high-profile companies normalized liquidity, the behavior spread. The stigma faded, and participation multiplied.

2. Institutions Went Hunting for Alpha

Public markets have become crowded, efficient, and often uninspiring. Institutional capital needed new territory.

Private secondaries offered exactly what they wanted: access to high-growth companies without early-stage volatility.

For pension funds, sovereign wealth funds, and major allocators, secondaries provide:

• Exposure to proven, late-stage companies
• Vintage diversification
• The potential to buy at a discount relative to the last primary round
• A way to refine existing private portfolios rather than passively hold

This isn’t just allocation. It’s active portfolio engineering. Investors are trimming legacy positions, rotating into higher conviction assets, and using secondaries the way they once used public equities.

More capital participants. More shares trade hands. Volume grows.

3. Valuations Reset and Price Discovery Started Working

The end of near-zero interest rates forced a long-overdue correction in private company valuations.

For years, sellers anchored to peak-era numbers while buyers refused to chase inflated expectations. Deals stalled because the gap was too wide.

Now the reset has aligned expectations.

• Sellers are more realistic
• Buyers see value rather than froth
• The bid-ask spread has narrowed enough for deals to clear

Meanwhile, pricing data improved dramatically. Transaction comps, revenue metrics, platform-level pricing feeds, and benchmarking tools have made valuation more analytical and less speculative.

Once both sides could price with confidence, volume followed.

4. The Tech Stack Finally Caught Up

Historically, private transactions were conducted via email, PDFs, reference calls, and opaque negotiation. It was slow, fragmented, and inconsistent.

Today, dedicated platforms have transformed the process.

• Compliance and accreditation are digitized and automated.
• Pricing information is transparent
• Standardized legal frameworks reduce complexity
• Execution cycles now take weeks instead of months.

Platforms like Forge, Carta, and others didn’t simply digitize the workflow. They legitimized the asset class and made participation scalable.

Trust increased, and friction decreased, which is exactly what a marketplace needs to grow.

How Much Revenue Can a Private Share Trading Platform Generate?

A private share trading platform can generate strong recurring revenue if it captures meaningful transaction flow and maintains custody of private assets. The business will often scale faster once institutional investors participate because liquidity improves and confidence increases. 

If the platform is designed well, it may evolve into a high-margin infrastructure play where transaction fees, servicing, and access monetization work together smoothly and reliably.

Private share marketplaces typically monetize across four primary channels:

1. Transaction Fees (Commission)

The dominant revenue source for most platforms.

Structure: 1–2% of transaction value, usually shared between buyer and seller

Dynamic: Scales with trading volume, meaning revenue grows as the platform matures

2. Subscription or Access Fees

Charged to companies, fund managers, and institutional buyers for platform access, analytics, compliance support, or deal exposure.

Range: From a few hundred dollars per month to $10K–$50K per year, depending on tier and data access

3. Custody and Asset Servicing Fees

Ongoing revenue tied to managing share ownership, governance workflows, corporate actions, and cap table servicing.

Typical structure: 0.10%–0.50% of Assets Under Administration (AUA)

4. Financing and Interest Margin

Revenue generated from lending against portfolios, margin trading, or yield on idle escrow balances. For scaled platforms, this becomes a meaningful and high-margin line item.

Revenue Model: Mid-Market Platform Example

Below is a realistic scenario for a platform serving late-stage tech companies and accredited investors.

Model Inputs

Resulting Revenue Estimate

Insight

This model delivers a balanced revenue mix that is not dependent on a single activity. As platform engagement grows, both GMV and AUA compound, strengthening recurring revenue and creating a flywheel effect.

Benchmarks: Comparing to Existing Market Operators

1. Carta

Originally a SaaS platform for cap table management, Carta has expanded into liquidity services, fund administration, and marketplace execution.

• Estimated $12B+ in annual secondary volume (2021)
• Even at an assumed 1% take rate, transaction revenue alone exceeds $120M
• Combined with SaaS subscriptions from tens of thousands of customers, total revenue is reported in the hundreds of millions

This validates the diversified model of software, marketplace activity, and asset servicing.

2. Forge Global (NYSE: FRGE)

A public marketplace operator focused on private equity liquidity.

• Q4 2023 trading volume: $157.1M, annualized to ~$628M
• Quarterly transaction revenue: $8.2M, annualized to ~$32.8M
• Implied take rate: ~5.2%

This significantly exceeds the 1.5% used in our model and reflects the premium pricing earned by platforms handling complex, negotiated trades.

Common Challenges of a Private Share Trading Platform

After building and scaling multiple private trading systems, we’ve seen the same challenges surface repeatedly. These aren’t theoretical or academic issues. They appear once a platform starts onboarding real issuers, real investors, and real regulatory scrutiny. At Idea Usher, we’ve learned to anticipate these friction points and engineer solutions that hold up in production environments.

Below are the most common challenges and how we address them.

1. Regulatory Fragmentation Across Markets

Regulatory rules vary across countries and even states. Every trade may require different accreditation checks, disclosures, and compliance steps. Handling this manually slows growth and increases legal exposure.

Our Solution: The Adaptive Compliance Engine

• Jurisdiction-aware rule logic: Regulatory requirements are encoded into a rules engine that automatically applies the right checks based on both transaction geography and user identity.
• Modular compliance components: Expanding into a new region doesn’t require a rebuild. We attach new regulatory modules like software extensions.
• Unified audit history: Every compliance event is logged into a standardized, immutable format that supports regulator inquiries, investor reporting, and internal oversight.

This approach reduces onboarding friction while maintaining regulatory alignment across borders.

2. Ensuring Low-Latency Decisioning 

In public markets, matching engines prioritize speed. In private markets, every order must first clear a stack of eligibility checks: accreditation, suitability scoring, risk limits, asset-specific restrictions, and regulatory filters. If this logic runs sequentially and synchronously, latency spikes. Even a delay of a few seconds hurts user experience and undermines trust.

Our Solution: A Decoupled, High-Performance Architecture

• Pre-trade risk gateway: A specialized gateway backed by in-memory storage such as Redis performs near-instant rule checks without hitting the primary database.
• Asynchronous compliance pipelines: Critical checks run before execution while secondary checks run in parallel without blocking trades.
• Microservices and isolation: The matching engine, compliance engine, and risk engine operate independently. If one component slows down, it doesn’t cascade across the entire stack.

This allows platforms to support compliance-heavy transactions without sacrificing responsiveness.

3. Handling Non-Standard Private Asset Valuation

Private securities do not benefit from live market feeds. Valuations may come from third-party reports, internal accounting, cap table updates, model-derived NAVs, or management-provided estimates. Platforms need a way to treat these values as controlled, auditable data rather than informal references.

Our Solution: A Centralized, Versioned Valuation Service

• Dedicated valuation workflow: A separate valuation service ingests, calculates, reviews, and approves pricing data before it reaches users.
• Version control: Every valuation is timestamped, stored, and tracked as its own version to support investor disclosures, audits, and dispute resolution.
• Platform-wide synchronization: Once approved, valuations propagate to the trading engine, dashboards, and reporting modules automatically.

The result is a consistent pricing framework that supports transparency without pretending private assets behave like public equities.

4. Ensuring Data Isolation While Maintaining Performance

Private markets require strict information boundaries. No fund manager can see another issuer’s financial data, and no investor can access another investor’s position. Enforcing this at scale is challenging. If isolation happens only at the application layer, query complexity increases, and performance degrades as the platform grows.

Our Solution: Defense-in-Depth Security Architecture

• Context tagging at the API layer: Every request is processed with user-specific metadata that filters data at the gateway level.
• Row-Level Security (RLS) enforcement: The database itself blocks access to unauthorized rows. Even if an application bug appears, the database remains a final safeguard.
• Performance-optimized querying: Because RLS is handled by optimized database logic, performance remains strong even with complex permission structures.

This ensures confidentiality, compliance, and scalability without compromising system responsiveness.

Tools & APIs to Build a Private Share Trading Platform

Building a private share trading platform is similar to assembling a precision engine. Each part, including trading logic, compliance automation, security, and data infrastructure, must function independently while operating together as a cohesive system. Below is a practical breakdown of the essential components and why they matter.

1. Trading and Market Infrastructure

This layer handles the processing, matching, and finalization of orders. Performance here directly impacts user experience.

FIX API / FIX Engine

The FIX (Financial Information eXchange) protocol is the communication standard for the financial industry. Integrating a FIX engine enables the platform to connect with broker-dealers, custodians, liquidity providers, and institutional order routing systems.

Matching Engine Frameworks

The matching engine determines how orders interact. It may be built using high-performance languages such as Go, C++, or Java, or accelerated with frameworks like NestJS in a microservices setup. The priority is modular scalability, so the matching engine can evolve without affecting the rest of the system.

Ledger and Settlement Layer

Every executed trade must be recorded accurately and immutably. PostgreSQL can serve as a traditional settlement datastore. For platforms involving tokenized or programmable securities, a permissioned blockchain provides built-in immutability and automated settlement logic.

2. Security and Identity

Identity validation and ongoing monitoring are critical requirements in private markets.

• KYC and KYB Verification APIs (Plaid, Trulioo, Onfido): These services automate identity and business verification, AML screening, and watchlist checks. This shortens onboarding time while maintaining regulatory obligations.
• Identity Platforms (Stripe Identity, iComply): These platforms manage identity workflows, verification, document storage, and ongoing monitoring across the user lifecycle.

3. Compliance Engines

Compliance must operate continuously rather than as a manual review layer.

• Open Policy Agent (OPA): OPA separates business rules from application code. Policies such as investor eligibility, asset-specific rules, and jurisdiction restrictions can be updated without rewriting the core application.
• RegTech Automation Services: These services handle automated reporting, suspicious activity monitoring, and maintenance of standardized audit histories that support regulator reviews.

4. Data Infrastructure

Data must move quickly, securely, and consistently across the platform.

• Redis (In-Memory Cache): Redis supports ultra-low-latency operations, such as order books, session management, and real-time risk checks.
• PostgreSQL with Row-Level Security: PostgreSQL offers ACID compliance and advanced permissioning. RLS enforces strict issuer, investor, and role isolation at the database level instead of relying only on application logic.
• Apache Kafka (Streaming Layer): Kafka distributes event streams such as orders, executions, and pricing updates to all dependent services. This keeps the trading engine, ledger, compliance monitoring, and user-facing applications synchronized.

Top 5 Private Share Trading Platforms in the USA

We completed a detailed review and identified several private share trading platforms with strong performance and well-engineered features. Some offer zero commission stock and ETF access, while others focus on multi-asset trading and advanced charting with fast execution.

1. Fidelity

Fidelity is one of the most trusted U.S. brokerage platforms, known for its strong research tools and a wide selection of investment options, including stocks, ETFs, and mutual funds. With no commissions on trades and a user-friendly interface, it’s a great choice for both beginners and long-term investors.

2. Charles Schwab

Charles Schwab is a well-rounded platform offering commission-free stock and ETF trades, professional research resources, and extensive educational content. It’s well-suited for both beginners and experienced investors thanks to its simple interface and powerful tools.

3. Interactive Brokers

Interactive Brokers is ideal for active and advanced traders due to its sophisticated trading tools, low margin rates, and access to global markets. While the interface may feel advanced for beginners, its low fees and capabilities make it appealing for serious traders.

4. E*TRADE

E*TRADE offers commission-free trades, great platforms, and helpful research features, striking a balance between simplicity and advanced functionality. It’s beginner-friendly while still providing useful tools for options and experienced traders.

5. Robinhood

Robinhood is designed for simplicity and accessibility, making it popular among beginner traders and younger investors. It offers commission-free trading through an intuitive app-first design, but lacks some advanced tools found on larger platforms.

Conclusion

Private share trading platforms are quickly becoming essential to modern capital markets because they offer real liquidity reduced operational overhead and new revenue opportunities and when you combine a compliance first architecture with flexible matching logic strong valuation controls and secure role based access you get a system that can scale confidently and meet institutional demands so if you are planning to build or upgrade your marketplace Idea Usher could support everything from architecture and compliance planning to development testing and launch while helping you move faster and stay aligned with regulation.

Looking to Develop a Private Share Trading Platform?

IdeaUsher can help you plan and architect a private share-trading platform from the ground up, ensuring every workflow aligns with compliance and scalability. Our team can design and build the core trading engine, role-based access system, and secure integrations so the platform performs reliably. 

Leveraging 500,000+ hours of coding experience and the deep architectural knowledge of our ex-MAANG/FAANG team, we deliver private trading platforms that stand up to regulatory scrutiny and institutional demands.

• Architected for Performance: Ultra-low latency and high availability.
• Engineered for Compliance: Built-in KYC/AML and granular access controls.
• Proven Expertise: Check out our portfolio to see our capabilities.

Let’s discuss your vision for a private marketplace.

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