Source: Tiger Research

Compiled by AididiaoJP, Foresight News

summary

• Although the private equity market offers high returns, it is still mainly for institutional investors and high-net-worth individuals, making it difficult for ordinary investors to participate.
• Tokenization can address the limitations of the traditional financial system in terms of liquidity, accessibility, and convenience, but still faces significant legal and technical hurdles.
• Projects like Ventuals, Jarsy, and PreStocks are exploring different approaches to tokenizing private equity. While these efforts are still in their early stages, they already show the potential to lower structural barriers in the market.

Private equity is attractive, but out of reach for ordinary investors

How can the average person invest in SpaceX or OpenAI? As private companies, they are out of reach for most investors. The chances of ordinary investors participating are almost zero, as investment opportunities typically only emerge after a company goes public.

The core of the problem is that ordinary investors have been excluded from the outsized returns generated by private markets, which have created roughly three times the value of public markets over the past 25 years.

These structural barriers stem from two core factors. First, the private equity firm's fundraising process is highly sensitive; regardless of the investor's qualifications, deals are typically only open to well-known institutional investors. Second, the growth of the private equity capital market has provided companies with more financing options, allowing many companies to raise billions of dollars without going public.

OpenAI exemplifies both of these dynamics. In October 2024, it raised $6.6 billion from major investors including Thrive Capital, Microsoft, Nvidia, and SoftBank. By March 2025, it had raised another $40 billion in a funding round led by SoftBank and with participation from Microsoft, Coatue, and Altimeter, making it the largest private financing round in history.

This phenomenon reveals a reality: only a small number of institutional investors can participate in the private equity market, while a mature private capital infrastructure provides these companies with financing options other than listing.

As a result, today’s investment environment is becoming increasingly closed, exacerbating the unequal 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 is appealing: real-world assets are converted into digital tokens, enabling fragmented ownership and supporting 24/7 trading on global markets. However, tokenization is essentially repackaging existing assets, such as pre-IPO equity, into a new form. Solutions to improve access already exist in traditional finance.

 Source: ustockplus

For example, platforms such as Dunamu's Ustockplus in South Korea, Forge and EquityZen in the United States allow ordinary investors to trade private equity stocks within the existing regulatory framework.

So, what is unique about tokenization?

The key lies in market structure. Traditional platforms utilize a peer-to-peer (P2P) matching model, where buyers must wait for sellers to place orders. Without a counterparty, trades cannot be completed. This model suffers from low liquidity, limited price discovery, and unpredictable execution times.

Tokenization holds the potential to address these structural limitations. If tokenized assets are listed on centralized exchanges (CEXs) or decentralized exchanges (DEXs), liquidity pools or market makers can provide consistent counterparties, improving execution efficiency and pricing accuracy. Beyond reducing friction, this approach can also redefine market architecture.

Furthermore, tokenization enables capabilities that are beyond the reach of traditional financial systems. Smart contracts can automate dividend distribution, execute conditional transactions, or implement programmable governance rights. These capabilities open the door to new financial instruments designed for flexibility and transparency.

Projects trying to tokenize pre-IPO equity

Ventuals

 Source: Ventuals

Ventuals utilizes a perpetual contract structure. Its core advantage lies in enabling derivatives trading without holding the underlying asset. This allows the platform to quickly list a large number of pre-IPO stocks while circumventing conventional regulatory requirements such as identity verification or accredited investor certification.

Perpetual contracts are implemented using Hyperliquid’s HIP-3 standard. However, this standard is currently only running on the testnet, and Venturs is still in the pre-release stage.

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 1 vOAI token is $350.

This low-barrier model also presents structural challenges, the most prominent of which is reliance on oracles. Private equity firm valuation data is inherently opaque and infrequently updated. Derivatives based on this incomplete information can exacerbate information asymmetry in the market.

Jarsy

 Source: Jarsy

Jarsy utilizes a 1:1 asset-backed tokenization model. Its core mechanism involves directly acquiring pre-IPO shares and issuing one token for each share held. For example, if Jarsy holds 1,000 SpaceX shares, it will mint 1,000 JSPAX tokens. Although investors don't directly own the underlying shares, they retain all associated economic rights, including dividends and share price appreciation.

 Source: Jarsy

This model relies on Jarsy acting as the asset management entity. The platform first tests investor demand through a pre-sale of tokens, then uses the raised funds to purchase actual shares. If the purchase is successful, the pre-sale tokens are converted to official tokens; otherwise, the funds are refunded. All assets are held by a special purpose vehicle (SPV), with real-time verification provided via the Proof of Reserves page.

The platform also significantly lowers the investment threshold, with a minimum investment of just $10. There are no eligibility requirements for investors outside the United States, 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 limited size of the platform's holdings in each company. For example, Jarsy currently holds approximately $350,000 in X.AI, $490,000 in Circle, and $670,000 in SpaceX shares, respectively. In this illiquid market, even a small sell order from a large holder can trigger significant price fluctuations. Price discovery is particularly difficult due to the inherent opacity and illiquidity of private equity, further amplifying volatility.

Furthermore, while the asset-backed model provides stability, it limits scalability. Each new token issuance requires the actual purchase of shares, a process that involves negotiation, regulatory coordination, and potential procurement delays, hindering the platform’s ability to respond to rapidly changing market trends.

Despite this, Jarsy is still in its early stages, having been online for just over a year. As its user base and assets under management (AUM) grow, liquidity issues may gradually ease. As the platform expands, broader reach and deeper pools of tokenized equity may naturally lead to a more stable and efficient market.

PreStocks

 Source: PreStock

PreStocks uses a similar model to Jarsy, purchasing shares of privately-held companies and issuing backed tokens at a 1:1 ratio. The platform currently supports trading in 22 pre-IPO stocks and has opened its products to the public.

PreStocks is built on the Solana blockchain, enabling trading through integrations with Jupiter and Meteora. It offers 24/7 trading and instant settlement, with no management fees. With no minimum investment requirement, anyone with a Solana-compatible wallet can participate, further lowering the barrier to entry.

However, the platform does have some limitations, making it inaccessible to users in the United States and other major jurisdictions. While all tokens are purportedly fully collateralized by underlying stocks, PreStocks has yet to publicly release detailed verification documentation. The team states that it will publish regular external audit reports and offers individual verification services upon request for a fee.

Compared to Jarsy, PreStocks has tighter integration with decentralized exchanges (DEXs), potentially enabling broader secondary use cases like token lending. Tokenized public stocks (e.g., xStock) are already actively used within the Solana ecosystem, and PreStocks may benefit from ecosystem-level synergies.

Unresolved Hurdles in Pre-IPO Stock Tokenization

The tokenized stock market is taking shape, and while platforms like Ventuals, Jarsy, and PreStocks are showing early momentum, significant structural challenges remain.

First, regulatory uncertainty is the most fundamental obstacle. Most jurisdictions still lack a clear legal framework for tokenized securities. As a result, many platforms operate in a regulatory gray area, exploiting jurisdictional arbitrage without directly complying with regulations.

Second, resistance from private equity firms remains a key obstacle. In June 2025, Robinhood announced a new service for EU clients, offering tokenized investment exposure to companies like OpenAI and SpaceX. OpenAI immediately objected, stating, "These tokens do not represent equity in OpenAI, and we have no partnership with Robinhood." This response highlights the reluctance of private equity firms to relinquish control over equity structures and investor management, closely guarded core functions.

Third, the technical and operational complexities cannot be ignored. Maintaining a reliable link between real-world assets and tokens, handling cross-border compliance, navigating 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 stated plans to expand its token offering to thousands of assets by the end of the year, despite facing numerous challenges in public markets. Platforms such as Ventuals, Jarsy, and PreStocks are also making progress through differentiated tokenized equity access methods.

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