Source: Tiger Research
Compiled by: AididiaoJP, Foresight News
Summary
Despite the high returns offered by the private equity market, it remains primarily targeted at institutional investors and high-net-worth individuals, making it difficult for ordinary investors to participate.
Tokenization can address the limitations of traditional financial systems in liquidity, accessibility, and convenience, but still faces significant legal and technical barriers.
Projects like Ventuals, Jarsy, and PreStocks are exploring different approaches to tokenizing private equity. Although these attempts are still in their early stages, they already show potential to reduce structural barriers in the market.
Private equity is highly attractive, but ordinary investors cannot participate.
How can ordinary people invest in SpaceX or OpenAI? As non-public companies, they are out of reach for most investors. The opportunity for participation for ordinary investors is almost zero, as investment opportunities usually only arise after the company goes public.
The core issue lies in the exclusion of ordinary investors from the high returns generated by the private market. Over the past 25 years, the value created by the private market is approximately three times that of the public market.
These structural barriers stem from two core factors. First, the financing process of private companies is highly sensitive, and transactions are typically only open to well-known institutional investors, regardless of the qualifications of other investors. Second, the growth of the private capital market has provided companies with more financing options, allowing many to raise billions of dollars without going public.
OpenAI is a typical example of both dynamics. In October 2024, it raised $6.6 billion from major investors like Thrive Capital, Microsoft, NVIDIA, and SoftBank. By March 2025, it raised an additional $40 billion in a funding round led by SoftBank, with participation from Microsoft, Coatue, and Altimeter, becoming the largest private financing in history.
This phenomenon reveals a reality: only a small number of institutional investors can participate in the private market, while mature private capital infrastructure provides these companies with financing options outside of going public.
Therefore, today's investment environment is becoming increasingly closed, exacerbating inequalities in the distribution of high-growth opportunities.
Equal access, can tokenization solve structural barriers?
Can tokenization truly solve the structural inequalities in the private equity market?
On the surface, this model appears appealing: real-world assets are converted into digital tokens, enabling fragmented ownership and supporting round-the-clock trading in global markets. However, in essence, tokenization merely repackages existing assets like Pre-IPO equity into a new form. Solutions that improve accessibility already exist in traditional finance.
Source: ustockplus
For example, platforms like Dunamu's Ustockplus in South Korea, Forge, and EquityZen in the United States allow ordinary investors to trade private stocks within the existing regulatory framework.
So, what is unique about tokenization?
The key lies in the market structure. Traditional platforms use a peer-to-peer (P2P) matching model, where buyers must wait for sellers to place orders. If there is no counterparty, the transaction cannot be completed. This model has issues such as low liquidity, limited price discovery, and unpredictable execution times.
Tokenization is expected to address these structural limitations. If tokenized assets are listed on centralized exchanges (CEX) or decentralized exchanges (DEX), liquidity pools or market makers can provide continuous counterparties, thereby improving execution efficiency and pricing accuracy. In addition to reducing friction, this approach can redefine market architecture.
Moreover, tokenization can achieve functionalities that traditional financial systems cannot support. Smart contracts can automatically allocate dividends, execute conditional trades, or realize programmable governance rights. These functionalities enable the emergence of new financial instruments that are designed to be both flexible and transparent.
Projects attempting to tokenize Pre-IPO equity
Ventuals
Source: Ventuals
Ventuals builds a perpetual contract structure. Its core advantage lies in enabling derivative trading without needing to hold the underlying assets. This allows the platform to quickly launch a large number of Pre-IPO stocks while avoiding conventional regulatory requirements like identity verification or accredited investor certification.
Perpetual contracts are realized through Hyperliquid's HIP-3 standard. However, this standard is currently only operational on the test network, and Ventuals is still in the prerelease phase.
Its pricing model is also unconventional; the token price is not based on stock prices or actual market transactions but is calculated by dividing the company's total valuation by 1 billion. For example, if OpenAI's valuation is $35 billion, then the price of one vOAI token would be $350.
This low-threshold model also presents structural challenges, the most prominent being the oracle dependency issue. The valuation data of private companies is opaque and infrequently updated. Derivatives based on such incomplete information may exacerbate information asymmetry in the market.
Jarsy
Source: Jarsy
Jarsy employs a 1:1 asset-backed tokenization model. Its core mechanism is to directly acquire Pre-IPO stocks and issue one token for each share 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 associated economic rights, including dividends and capital appreciation.
Source: Jarsy
This model relies on Jarsy as the asset management entity. The platform first tests investor demand through a presale token, then uses the funds raised to purchase actual stocks. If the purchase is successful, the presale tokens will be converted into formal tokens; otherwise, the funds will be refunded. All assets are held by a special purpose vehicle (SPV) and real-time verification is provided through a reserve proof page.
The platform has also significantly lowered the investment threshold, with a minimum investment of just $10. For investors outside the U.S., there are no qualification requirements, thereby expanding global accessibility. All transaction records and asset holdings are stored on-chain, ensuring auditability and transparency.
However, this model has structural limitations. The most pressing issue is liquidity, arising from the platform's limited asset holding scale for each company. For example, Jarsy currently holds stocks worth approximately $350,000, $490,000, and $670,000 in X.AI, Circle, and SpaceX, respectively. In this low-liquidity market, even small sell orders from large holders can trigger significant price fluctuations. Due to the opacity and poor liquidity of private equity itself, price discovery is particularly difficult, further amplifying volatility.
In addition, although the asset-backed model provides stability, it limits scalability. The issuance of each new token requires the actual purchase of stock, a process that involves negotiation, regulatory coordination, and potential procurement delays, hindering the platform's ability to respond to rapidly changing market trends.
Nevertheless, Jarsy is still in its early stages, having been online for just over a year. As the user base and assets under management (AUM) grow, liquidity issues may gradually ease. With the expansion of the platform, a broader reach and a deeper pool of tokenized equity may naturally form a more stable and efficient market.
PreStocks
Source: PreStock
PreStocks adopts a model similar to Jarsy, purchasing shares of private companies and issuing endorsed tokens at a 1:1 ratio. The platform currently supports trading of 22 types of Pre-IPO stocks and has opened its products to the public.
PreStocks is built on the Solana blockchain and achieves trading through integration with Jupiter and Meteora. It offers round-the-clock trading and instant settlement without charging management fees. There is no minimum investment requirement, allowing anyone with a Solana-compatible wallet to participate, further lowering the entry barrier.
However, the platform also has some limitations, as users from the U.S. and other major jurisdictions cannot access it. Although all tokens are reportedly fully collateralized by the underlying stocks, PreStocks has yet to publicly disclose detailed holding verification documents. The team states that they will regularly publish external audit reports and can provide paid individual verification services upon request.
Compared to Jarsy, PreStocks has tighter integration with decentralized exchanges (DEX), which may support broader secondary use cases like token lending. In the Solana ecosystem, tokenized public stocks (like xStock) are already actively used, and PreStocks may benefit from ecosystem-level synergies.
Unresolved barriers to Pre-IPO stock tokenization
The tokenized stock market is beginning to take shape. Although platforms like Ventuals, Jarsy, and PreStocks show early development momentum, significant structural challenges remain.
First, regulatory uncertainty is the fundamental barrier. Most jurisdictions still lack a clear legal framework for tokenized securities. As a result, many platforms operate in a regulatory gray area, actively engaging in jurisdictional arbitrage without direct compliance.
Secondly, resistance from private companies remains a key obstacle. In June 2025, Robinhood announced a new service for EU customers that provides exposure to tokenized investments in companies like OpenAI and SpaceX. OpenAI immediately publicly opposed this, stating, "These tokens do not represent equity in OpenAI, and we have no partnership with Robinhood." This response highlights private companies' unwillingness to relinquish control over equity structuring and investor management, which are core functions they tightly guard.
Third, the complexity of technology and operations cannot be overlooked. Maintaining a reliable link between real-world assets and tokens, handling cross-border compliance issues, addressing tax implications, and executing shareholder rights are all non-trivial challenges. These issues may severely limit user experience and scalability.
Despite these limitations, market participants are actively seeking solutions. For instance, Robinhood has announced plans to expand its token products to thousands of assets by the end of the year, despite facing numerous challenges in the public market. Platforms like Ventuals, Jarsy, and PreStocks continue to advance differentiated tokenized equity access methods.
In short, tokenization offers a promising path to improving access to the private equity market, but this field is still in its infancy. Current limitations are real, but history in the crypto space indicates that technological breakthroughs and rapid market adaptation can, and often do, redefine possibilities.