Why a $100m Series B startup decided to test the LSE’s new private market

The Missing Middle in Venture Capital

For a long time, the path for a tech company was linear: you raise seed, you grind through your Series A and B, and then you either get bought by a giant or you pray for an IPO window that actually stays open. But the middle ground has become a graveyard. Late-stage private companies are staying private longer, creating a liquidity logjam for early employees and seed investors who have been waiting a decade for a payday.

London is trying to fix this. The London Stock Exchange Group just launched Pisces (Private Intermittent Securities and Capital Exchange System). It is a new type of sandbox that allows private companies to trade shares periodically without the soul-crushing compliance costs of a full public listing. Veremark, a background checking startup that recently closed a $100m Series B, is the first to step up to the plate. This is not just a UK experiment; it is a test case for how we value and trade private tech globally.

The PISCES Mechanism

If you have ever dealt with a secondary sale in a private company, you know it is a nightmare. It usually involves months of paperwork, board approvals, and right-of-first-refusal hurdles. It is opaque and expensive. Pisces tries to automate this by creating specific windows where trading can happen. Think of it as a controlled release valve.

For a founder like Daniel Callaghan at Veremark, the appeal isn't just about the cash. It is about talent retention. When you tell a senior engineer that their equity is worth millions but they cannot buy a house with it for another five years, you lose them. By providing a structured way for team members to sell small slices of their holdings, you keep them in the game longer. You turn paper wealth into actual utility without giving up control of the cap table.

Why the LSE is Desperate

We have to be honest about the context here. The London Stock Exchange has been bleeding. Founders have been fleeing to the Nasdaq for higher valuations and deeper pools of capital. The LSE needs a win, and they are betting that by capturing companies earlier in their lifecycle, they can build a pipeline for future IPOs. They are positioning Pisces as a "halfway house."

But as a builder, you have to ask: what is the cost? The LSE claims this will be cheaper than a traditional listing, but you are still dealing with a regulated exchange. There will be disclosure requirements. There will be transparency mandates that many private companies are not ready for. If you are a founder who likes to run lean and fast without answering to a crowd of retail investors, this might feel like putting on a suit that is two sizes too small.

The Risks of Intermittent Liquidity

The danger with a platform like Pisces is the volatility of perception. In a private round, your valuation is set by a lead investor every 18 to 24 months. It stays static on paper. In an intermittent market, you might see your "price" fluctuate based on a few small trades. If the market sentiment soured during one of these trading windows, it could create a negative signaling effect for your next institutional round.

Founders need to be careful about who they let into these windows. If the platform is flooded with sellers and there are no buyers, the price craters, and suddenly your recruitment pitch about "growing share value" looks like a lie. This is the double-edged sword of transparency. Once you let the market decide what you are worth, you lose the ability to control the narrative that traditional VC rounds provide.

The Founder's Perspective

I look at this from a builder's lens. If I am running a Series B company, my biggest problem is focus. Does managing a periodic trading window take my eyes off the product? Probably. Is it worth it to keep my early backers happy? Maybe. The real value here is for the institutional investors who are tired of waiting for exits. They are the ones pushing for these types of platforms.

Veremark is the guinea pig. If they can successfully facilitate secondary trades without crashing their valuation or drowning in legal fees, others will follow. But do not mistake this for a shortcut to the big leagues. It is an administrative tool disguised as a market innovation. It solves a cap table problem, not a business model problem.

What This Means for the Future of AI and Crypto

There is a clear crossover here with how we think about tokenization in crypto. The LSE is essentially trying to build a regulated version of a secondary token market. They want the liquidity of decentralized finance with the oversight of a centuries-old institution. For builders in the AI space, where capital requirements are massive and timelines to profitability are long, these "intermittent" markets could become the standard way to fund the long-term R&D cycles.

If you are a founder, keep your eye on Veremark's first few trading windows. Watch the spread between their private valuation and the price shares actually move at. That gap is the price of liquidity. If that gap is too wide, Pisces will just be another failed experiment in financial engineering. If it is tight, we might be looking at the end of the traditional IPO as we know it.

The Takeaway

Liquidity is the ultimate drug for investors, but for builders, it can be a distraction. The LSE's Pisces platform is a bold attempt to bridge the gap between private control and public cash. If you are a founder, do not rush into this because it feels prestigious. Use it if, and only if, your cap table is so bloated with restless early investors that it is starting to affect your culture. Otherwise, keep your head down and build. The market will always be there when you are actually ready for it.

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