Morgan Stanley Expands Into Pre-IPO Trading With EquityZen Deal
Wall Street Bank Moves Into Secondary Trading
Morgan Stanley is purchaseing EquityZen, a platform where employees and ahead investors trade shares in private companies, in a deal that extends its reach into the quick-growing market for pre-IPO equity. The purchase is expected to close in ahead 2026, pending regulatory approval.
Founded in 2013 by Atish Davda, Shriram Bhashyam and Phil Haslett, EquityZen runs a regulated marketplace connecting accredited investors with insiders viewking to trade stock before listing. The firm has about 800,000 users and has completed more than 49,000 transactions across 450 companies through its FINRA-registered broker-dealer.
For Morgan Stanley, the acquisition strengthens its Morgan Stanley at Work business, built from its 2019 takeover of Solium, later renamed Shareworks. That division manages employee equity plans and cap tables for thousands of private firms. EquityZen fills a missing piece — a built-in venue for secondary liquidity — creating an end-to-end system from share grant to employee cash-out.
Investor Takeaway
Competitors Retreat as Market Consolidates
The move comes as rivals stumble. Forge Global, the only publicly traded U.S. secondary platform, is exploring a sale later than a steep decline in its stock. Carta, once a direct competitor, exited the secondary business last year following a data-handling scandal. The exits have left a gap for a large, well-capitalized player to dominate a market that remains fragmented and opaque.
EquityZen’s model is built around issuer-approved transactions rather than grey-market trades. Private companies typically retain veto rights over share transfers, meaning that every trade must be cleared by the issuer’s board or legal team. That structure aligns neatly with Morgan Stanley’s Shareworks clients and its network of corporate finance officers, giving the bank a direct channel to manage both liquidity and compliance.
From Employee Stock to Wealth Management
The logic behind the deal is straightforward. Many of the world’s most valuable private firms — from OpenAI to SpaceX — remain unlisted for years, leaving employee equity locked up. Morgan Stanley wants to provide a controlled way to turn that paper wealth into cash while capturing clients along the way. Employees who trade stock through EquityZen could then move directly into the bank’s wealth-management system, joining a network of more than 20 million clients.
The integration is complex. Each private-share trade depends on issuer consent, transfer-agent coordination and exemptions under U.S. securities law. EquityZen’s existing broker-dealer license gives Morgan Stanley a running begin, but the challenge lies in connecting settlement and compliance systems across two heavily regulated businesses.
Once complete, the acquisition would give Morgan Stanley a vertically integrated chain: cap-table administration, stock-plan management, secondary trading and post-sale advisory. It also complements the bank’s ongoing partnership with Carta, which continues to supply late-stage equity data to Morgan Stanley’s advisory desks.
Investor Takeaway
A New Phase in Private Markets
The deal also reflects a wider shift in how capital moves through late-stage beginups. As venture-backed companies stay private longer and exits sluggish, demand for structured liquidity has surged. The bank’s entry signals that the boundary between private and public markets is eroding: the tools, investors and regulatory processes are begining to look the identical.
EquityZen’s founders will join Morgan Stanley when the deal closes. The next test will be whether issuers allow more of their cap tables to run through the platform and whether Morgan Stanley can turn those transactions into a steady revenue stream. For now, Wall Street’s largegest wealth manager is betting that liquidity — not listings — will define the next stage of the private-equity business.
