Author: Ryan Yoon, Research Analyst at Tiger Research; Translation: Golden Finance Xiaozou

Although the private equity market offers rich returns, retail investors still find it difficult to participate; this domain remains an exclusive battleground for institutional investors and high-net-worth individuals.

Tokenization technology has the potential to address the inherent limitations of the traditional financial system—particularly issues of insufficient liquidity, high barriers to entry, and cumbersome operations—but significant legal and technical obstacles remain.

Projects like Ventuals, Zoshi, and FreeStock are exploring different paths for private equity tokenization. Although still in the early stages, these attempts have shown potential to break down structural barriers in the market.

1. The allure of private equity is great—but it has nothing to do with you

How can ordinary people invest in SpaceX or OpenAI? As unlisted companies, they are off-limits to most investors. Retail investors have almost no channels for participation—investment opportunities typically only appear after an IPO.

The core issue is that you are excluded from the high returns created in the private market. Over the past 25 years, the value created in the private market has been about three times that of the public market.

There are two structural factors behind this. Firstly, financing is a highly sensitive process for private companies. Regardless of investor qualifications, transactions often only go to well-known institutional investors. Secondly, the expansion of the private capital market has broadened financing channels. Many companies can now raise billions of dollars without going public.

OpenAI is a prime example of these two trends. In October 2024, it raised $6.6 billion from major investors such as Thrive Capital, Microsoft, Nvidia, and SoftBank. By March 2025, it received another $40 billion financing led by SoftBank, with participation from Microsoft, Coatue, and Altimeter, setting the record for the largest private financing round in history.

This is a system limited to specific institutional investors, and the mature private capital infrastructure provides companies with alternatives outside of going public.

Therefore, today's investment landscape shows increasingly severe exclusivity—aggravating the inequality in accessing high-growth opportunities.

2. Equal Participation—Can tokenization break the structural barriers?

Can tokenization technology truly address the structural inequalities in the private equity market?

On the surface, this model appears attractive: converting real-world assets into digital tokens, achieving fractional ownership, and supporting all-time trading in global markets. However, tokenization essentially only repackages existing assets like Pre-IPO equity into a new form—solutions to improve participation have long existed within the traditional financial system.

For example, platforms like Ustockplus in South Korea, and Forge and EquityZen in the United States, allow retail investors to participate in trading unlisted stocks within the existing regulatory framework.

So, what is the differentiated value of tokenization?

The key difference lies in the market structure. Traditional platforms adopt a peer-to-peer (P2P) matching model—buyers must respond to sellers' orders. If there is a lack of counterparties, transactions cannot be completed. This model has defects such as insufficient liquidity, limited price discovery, and uncertain execution timing.

Tokenization technology is expected to break through these structural limitations. If tokenized assets are listed on centralized exchanges (CEX) or decentralized exchanges (DEX), liquidity pools or market makers can provide continuous counterparty trading, thereby enhancing trade execution and pricing efficiency. Besides reducing friction, this approach will also reshape market architecture.

Moreover, tokenization can achieve innovative functions that traditional financial systems are unable to support. Smart contracts can automatically allocate dividends, execute conditional trades, or realize programmable governance rights. These features give rise to a new type of financial instrument—designed with both flexibility and transparency.

3. Pre-IPO equity tokenization projects

(1) Ventuals

Ventuals is built on a perpetual contract structure, with its core advantage being the ability to trade derivatives without holding the underlying asset. This design allows the platform to quickly launch various Pre-IPO stocks, circumventing conventional regulatory requirements such as identity verification or accredited investor certification.

This perpetual contract is implemented through Hyperliquid's HIP-3 standard, but this standard is currently only operational on the testnet, and Ventuals is still in the pre-release phase.

Its pricing model also breaks conventions: the token price is not based on the stock price or actual market transactions, but rather is derived by dividing the company's total valuation by one billion. For example, if OpenAI is valued at $35 billion, each vOAI token would be priced at $350.

However, this low barrier to entry comes with structural challenges—most notably, the reliance on oracle issues. The valuation data for unlisted companies is inherently opaque and updated with delays; derivatives based on such incomplete information may exacerbate market information asymmetry.

(2) Jarsy

Jarsy adopts a 1:1 asset-backed tokenization model. Its core mechanism is to directly acquire Pre-IPO shares and issue tokens on a 1:1 basis according to the shares held. For example, if Jarsy holds 1,000 shares of SpaceX stock, it will mint 1,000 JSPAX tokens. Although investors do not directly hold the underlying stocks, they enjoy all related economic rights—including dividends and price appreciation.

This model relies on Jarsy as the asset management entity: the platform first estimates market demand through pre-sale tokens, then pools funds to actually acquire shares. If the acquisition is successful, pre-sale tokens convert into official tokens; if it fails, refunds are issued. All assets are held by a special purpose vehicle (SPV) and can be verified in real-time through a proof of reserves page.

The platform has also significantly lowered the investment threshold to as low as $10. There are no qualification requirements for investors outside the United States, significantly enhancing global accessibility. All transaction records and asset holdings are stored on-chain, ensuring auditability and transparency.

However, this model faces structural limitations. The most pressing issue is insufficient liquidity—stemming from the limited holding size of each company. For instance, Jarsy currently holds approximately $350,000 in X.AI, $490,000 in Circle, and $670,000 in SpaceX assets. In such shallow markets, even small sell orders from large holders can trigger significant price fluctuations. Given the opacity and illiquidity characteristics of private equity, price discovery is already difficult, further amplifying volatility.

Moreover, while asset-backed tokenization provides stability, it sacrifices scalability. Each new token requires the actual acquisition of shares—this process involves negotiation, regulatory coordination, and potential procurement delays, limiting the platform's responsiveness to rapidly changing market trends.

Notably, Jarsy has been online for just over a year and is still in the early stages. As the user base and assets under management (AUM) grow, liquidity issues may gradually ease. When the platform achieves scale expansion, a wider coverage area and deeper tokenized equity pool can naturally cultivate a more stable and efficient market.

(3) PreStocks

PreStocks employs a similar operational model to Jarsy, acquiring shares of unlisted companies and issuing tokens on a 1:1 collateral basis. The platform currently supports trading of 22 Pre-IPO stocks and has recently opened its products to the public.

PreStocks, built on the Solana blockchain, achieves trading functionality through integration with Jupiter and Meteora. It offers 24/7 trading and instant settlement services, with no management fees or performance commissions. There are no minimum investment thresholds, and any user with a Solana-compatible wallet can participate—significantly lowering the barriers to entry.

However, there are specific limitations: users from the United States and other major jurisdictions cannot use the platform. Although the platform claims that all tokens are fully collateralized by the underlying stocks, detailed holding verification documents have not been disclosed. The team states that they will regularly release third-party audit reports and can provide paid single-transaction holding verification services upon request.

Compared to Jarsy, PreStocks has a closer integration with decentralized exchanges (DEX), which may foster a wider range of secondary application scenarios (such as token staking and lending). In the Solana ecosystem, tokenized public equities (like xStock) have already formed active usage scenarios, and PreStocks may benefit from synergistic effects at the ecosystem level.

(4) Barriers to Pre-IPO stock tokenization remain to be broken

The tokenized equity market has begun to take shape. Although platforms like Ventuals, Jarsy, and PreStocks show early signs of development, significant structural challenges still exist.

The primary obstacle is regulatory uncertainty.

Most jurisdictions still lack a clear legal framework for tokenized securities. Thus, many platforms operate in a regulatory gray area, maintaining operations without direct compliance through jurisdictional arbitrage.

Secondly, resistance from private enterprises remains a key barrier.

In June 2025, Robinhood announced the launch of tokenized exposure services for EU clients to companies like OpenAI and SpaceX. OpenAI immediately issued a public statement of opposition: "These tokens do not represent equity in OpenAI, and we have no partnership with Robinhood."

This response highlights private companies' desire to control equity structures and investor governance—this is their core function that they guard fiercely.

Thirdly, the complexity of technology and operations cannot be overlooked.

Maintaining a reliable connection between real assets and tokens, addressing cross-border compliance, handling tax implications, and implementing shareholder rights enforcement are all challenging tasks. These issues can severely constrain user experience and scalability.

Despite various limitations, market participants are actively seeking solutions. For example, although Robinhood has faced public criticism, it still claims to plan to expand tokenized assets to thousands of types by the end of the year. Platforms like Ventuals, Jarsy, and PreStocks are also continuously advancing differentiated paths for equity access tokenization.

In short, tokenization offers a viable path to improve accessibility in private equity, but the field is still in its early stages. Various current restrictions do exist, but the development history of the crypto space indicates that technological breakthroughs and rapid market adaptation can—and often do—redefine the boundaries of possibility.