Source: Tiger Research

Compiled by: AididiaoJP, Foresight News

Abstract

  • 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 regarding liquidity, accessibility, and convenience, but it 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 have already shown 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 private companies, they are out of reach for most investors. The chances for ordinary investors to participate are almost zero, as investment opportunities typically only arise after a company goes public.

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

This structural barrier arises from two core factors. First, the fundraising process of private companies is highly sensitive, and regardless of an investor's qualifications, transactions are usually only open to well-known institutional investors. Second, the growth of the private capital market provides companies with more financing options, allowing many firms to raise billions without going public.

OpenAI is a typical example of these two dynamics. In October 2024, it raised $6.6 billion from major investors including Thrive Capital, Microsoft, Nvidia, and SoftBank. By March 2025, it raised another $40 billion through a financing round led by SoftBank, with participation from Microsoft, Coatue, and Altimeter, becoming the largest private financing round in history.

This phenomenon reveals a reality: only a few institutional investors can participate in the private market, while mature private capital infrastructure provides these companies with financing options outside of public listings.

As a result, 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 address the structural inequalities in the private equity market?

On the surface, this model appears quite attractive: real-world assets are converted into digital tokens, enabling fragmented ownership and supporting 24/7 trading in global markets. However, in essence, tokenization is merely repackaging existing assets like Pre-IPO equity into a new form. Solutions to improve accessibility already exist in traditional finance.

Source: ustockplus

For example, platforms like Dunamu's Ustockplus in South Korea, Forge in the U.S., and EquityZen allow ordinary investors to trade private stocks within existing regulatory frameworks.

So what is unique about tokenization?

The key lies in market structure. Traditional platforms adopt 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 faces issues of 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 enable functionalities that the traditional financial system cannot support. Smart contracts can automatically distribute dividends, execute conditional trades, or implement programmable governance rights. These features open possibilities for 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 holding the underlying assets. This allows the platform to quickly launch a large number of Pre-IPO stocks while avoiding conventional regulatory requirements such as identity verification or accredited investor certification.

Perpetual contracts are implemented through Hyperliquid's HIP-3 standard. However, this standard is currently only operational on the testnet, and Ventuals is still in the pre-release phase.

Its pricing model is also unconventional; token prices are not based on stock prices or actual market transactions but are calculated by dividing the company's total valuation by a billion. For example, if OpenAI's valuation is $35 billion, the price of one vOAI token would be $350.

This low-barrier model also brings structural challenges, the most prominent of which is the reliance on oracle issues. Valuation data for private companies is itself opaque and updated infrequently. Derivatives based on such incomplete information may exacerbate information asymmetry in the market.

Jarsy

Source: Jarsy

Jarsy adopts 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 presale tokens, then uses the raised funds to purchase actual stocks. If the purchase is successful, the presale tokens will be converted into official tokens; otherwise, funds will be refunded. All assets are held by a special purpose vehicle (SPV) and provide real-time verification through a reserve proof page.

The platform also significantly lowers the investment threshold, with a minimum investment amount of only $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, which stems from the platform's limited asset holding size for each company. For instance, Jarsy's current holdings of X.AI, Circle, and SpaceX stocks are valued at approximately $350,000, $490,000, and $670,000, respectively. In such a low-liquidity market, even small sell orders from large holders can trigger significant price fluctuations. Given that private equity itself is opaque and illiquid, price discovery is particularly difficult, further amplifying volatility.

Additionally, although the asset-backed model provides stability, it limits scalability. Every new token issuance requires the actual purchase of stock, a process that involves negotiations, 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 platform's expansion, a broader coverage and deeper tokenized equity pool may naturally form a more stable and efficient market.

PreStocks

Source: PreStock

PreStocks adopts a model similar to Jarsy, purchasing private company stocks and issuing backed tokens at a 1:1 ratio. The platform currently supports trading of 22 Pre-IPO stocks and has made its products publicly available.

PreStocks is built on the Solana blockchain and facilitates trading through integration with Jupiter and Meteora. It offers 24/7 trading and instant settlement without charging management fees. There are no minimum investment requirements, and anyone with a Solana-compatible wallet can 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 backed by the underlying stocks, PreStocks has not publicly disclosed detailed verification documents of holdings. The team stated that they will regularly publish external audit reports and can provide paid individual verification services upon request.

Compared to Jarsy, PreStocks has a tighter integration with decentralized exchanges (DEX), which may support broader secondary use cases such as token lending. Within the Solana ecosystem, tokenized public stocks (like xStock) are already being actively used, and PreStocks may benefit from ecosystem-level synergies.

Obstacles that have not yet been resolved in Pre-IPO stock tokenization

The tokenized stock market is in the early stages of formation. Although platforms like Ventuals, Jarsy, and PreStocks show early development momentum, significant structural challenges remain.

First and foremost, regulatory uncertainty is the fundamental barrier. Most jurisdictions still lack a clear legal framework for tokenized securities. As a result, many platforms operate in regulatory gray areas, leveraging jurisdictional arbitrage without direct compliance.

Secondly, the resistance from private companies remains a key obstacle. In June 2025, Robinhood announced a new service for EU customers to provide 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 structures and investor management, which are core functions they closely guard.

Third, the complexity of technology and operations cannot be ignored. Maintaining a reliable connection between real-world assets and tokens, handling cross-border compliance issues, addressing tax implications, and enforcing shareholder rights are all non-trivial challenges. These issues could severely limit user experience and scalability.

Despite these limitations, market participants are actively seeking solutions. For example, Robinhood has announced plans to expand its token product to thousands of assets by the end of the year, despite facing significant challenges in the public market. Platforms like Ventuals, Jarsy, and PreStocks continue to advance through differentiated access methods for tokenized equity.

In short, tokenization offers a promising path to improving access in the private equity market, but this field is still in its infancy. Current limitations are real, but the history of the crypto space shows that technological breakthroughs and rapid market adaptation can, and often do, redefine possibilities.