Xavier, founder of Pre-Stocks, joins the Lightspeed Podcast with Carlos from Blockworks research to discuss tokenizing private companies on-chain. Pre-Stocks operates a platform that makes highly demanded private companies like SpaceX, Anthropic, and OpenAI accessible and tradable for retail users via tokenized versions on Solana.

The conversation explores Xavier's journey from software engineer at Canva to solving his own problem of accessing pre-IPO investments. Initially focused on pre-TGE token exposure and points speculation, Pre-Stocks evolved into tokenizing private equity after Xavier experienced the inefficiencies of traditional pre-IPO markets firsthand.

The discussion covers pricing mechanisms, arbitrage opportunities, regulatory considerations around accreditation requirements, and the technical challenges of providing liquidity for assets that traditionally require six-figure minimums and weeks-long settlement processes.

From Pre-TGE Speculation to Private Equity Tokenization

Xavier started Pre-Stocks to solve his own access problem as a Canva engineer wanting upside exposure to private companies like Airbnb, discovering retail investors face insurmountable barriers.

The initial focus was pre-TGE token exposure and points speculation, experimenting with over-collateralization and prediction markets across multiple chains before pivoting to private equity.

Traditional pre-IPO investing takes "eight weeks on average to close a deal" with manual phone calls, emails during business hours, and minimums of "six, seven, eight figures" - Xavier

The $8 trillion private equity asset class still operates like "a decade ago" with relationship-driven access and no transparent pricing, creating massive inefficiencies.

Tokenized Private Equity Mechanics and Arbitrage

Pre-Stocks tokens are "one-to-one backed" by SPV exposure with instant redemption capabilities, unlike closed-end funds that only provide quarterly updates and lack redemption mechanisms.

Redemption serves as a fallback mechanism where "the underlying essentially gets liquidated and the net USDC proceeds get passed back on-chain" for large traders avoiding price impact.

External price sources often show "outdated by weeks or even months" pricing or "just showing the last round valuation," making real-time token trading more accurate than traditional platforms.

Token pricing functions "like a prediction market" with continuous ranges, enabling real-time price discovery that news publications are beginning to quote as authoritative sources.

Solana Migration and Distribution Strategy

The move to Solana was driven by distribution needs rather than technical requirements, as "Solana had most of the retail mind share and most of the retail users."

Previous experiments on chains like Blast "mainly for the incentives" proved unsuccessful, teaching the team "don't chase the hype" and focus on objective decisions.

Solana's "internet capital markets" mission aligns with bringing TradFi on-chain, providing "top-down kind of alignment and support" for the Pre-Stocks vision.

Platform neutrality enables integration across "all the top trading apps and wallets" that are "natively integrated with Solana" as their primary chain.

Market Concentration and Expansion Plans

Private equity follows a power law distribution where "the top 20 names drive over 80% of all pre-IPO volume" and "top five to 10" represent "more than 50%."

Current seven tokenized companies could expand to "top 50" names, requiring "household brand name" recognition and sufficient "secondary trading and liquidity" for supply.

Chinese expansion targets include ByteDance, Unitree, Moonshot AI which are "notoriously hard to get, which makes it even more attractive" for retail access.

Crypto-native additions could include Kraken, Ripple, Tether as natural fits for the platform's user base and trading infrastructure.

Liquidity Solutions and Market Structure

AMMs work well "for price discovery and smaller trade sizes, let's say like five figures" but create constraints for larger traders requiring alternative solutions.

An RFQ system under development will support "larger trade sizes" up to "six figures for now" without significant price impact, complementing AMM liquidity.

Supply-side automation through "self-serve" SPV integration will enable more liquidity providers to "pass due diligence and then mint from your supply and tokenize it."

Spot markets must precede perpetuals development, as "you need like a real real-time, spot price first" to avoid funding rate volatility and poor user experience.

IPO Transition and Regulatory Landscape

Post-IPO transitions involve "six-month post-IPO lockup for stocks that were purchased prior to the IPO" before converting to tokenized public stocks.

Accreditation requirements "shouldn't exist at all" given that "people can already trade things that are a lot more speculative than private companies" - Xavier

Traditional SPV investors "generally don't get information rights anyway," creating "quite a level playing field" between sophisticated and retail investors.

Closed-end fund portfolios force investors to buy "names they don't care about," making them "very capital inefficient" compared to targeted single-asset exposure.