Forge

Forge

Forge

Forge

Forge is a marketplace for private equity, giving private and institutional investors access to top pre-IPO companies.

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Highlights

0 - 1,000%

Asset Class Return1Y

#23 Rank

In Startups30d

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Invest from

$100K

Overview

Your gateway to pre-IPO companies. In an environment when companies are staying private indefinitely, employees and early investors suffer from a lack of liquidity, diversification, and transparency. They help fix this by providing an online trading and information platform for brokering the offering, sale, and purchase of private company securities, in addition to providing tools to help you learn about, track, and manage your equity. Their online marketplace platform allows you to diversify your portfolio, invest in new opportunities, and gives you access to insights, price trends, and more. They provide custom liquidity solutions to private companies and their employees, and offer pre-IPO opportunities to institutions and investors.

Things to Know

  • You make money on

    Value

  • Fees

    5%

  • Min Investment

    $100,000

  • Payout frequency

    Asset sold

  • Term of investment

    60+ months

  • Target Return

    Varied

  • Liquidity

    Hard

  • Open to

    Accredited Only

  • Mobile Application

    No

Top Perks

  • Closed $1B+ in transactions in the last year

  • 200+ Institutional investors on Forge’s platform

  • Team have held positions at NYSE, Charles Schwab, SecondMarket, Goldman Sachs, Y Combinator & more

How you make money

Accredited investors will own an interest in an LLC, which owns the underlying shares of a private company. The majority of their focus is on well-established companies, with strong business models and market penetration, typically valued at more than $2 billion. They also regularly facilitate transactions in smaller companies (valued at $200 million - $2 billion). 

 

The private tech market is quickly becoming a meaningful portion of the suite of asset classes available in today’s financial markets. Assuming you already have a sufficiently diversified portfolio across a range of safe and moderately safe securities, it is certainly worth considering for inclusion in a balanced portfolio. Of course, each investor's situation is different, and suitability is a case-by-case conversation. But for many accredited investors, later-stage private market investments can certainly offer compelling investment opportunities while the companies are in the rapid value creation phase.

 

Their investment entity distributes the shares in each fund to investors once it determines that the shares become freely, practically, and feasibly transferable for any reason. A typical case is that the company has gone public or been acquired in exchange for cash and/or transferable shares in another company, after any lockup or holdback periods.

How Forge makes money

The fees they charge fund their rigorous review process, servicing, legal and compliance overhead, marginal transaction costs, and their efforts to grow and improve the efficiency of our platform. Their baseline fee is 5% to the buyer, and 5% to the seller. On certain transactions, they may need to charge a higher amount to one side (and charge proportionally less to the other), for structural or operational reasons. However, the "all-in" price to buyer and "net" price to seller (i.e., the net outcome to clients) would be similar or better even if it does deviate from the baseline. They will always be transparent in quoting the net price after fees to all parties, so that you are aware of the economics from the get-go.

Is it safe?

Investment opportunities posted on their website are "private placements" of securities that are not publicly traded, are subject to holding period requirements, and are intended for investors who do not need a liquid investment. Investing in private companies may be considered highly speculative and involves a high degree of risk, including the risk of substantial loss of investment. 

 

They conduct all transactions through a licensed broker-dealer, executed by General Securities Principals and Representatives, licensed by the SEC and registered by FINRA to engage in broker-dealer activities, as required by securities regulation. Their outside securities counsel is Lowenstein Sandler, one of the premier securities firms in the world. They and other leading firms developed the fund structure that underlies Forge Investments LLC, and worked extensively to make sure that their structure and contracts are compliant with regulation. Forge also engages topic experts and other law firms for matters like broker-dealer compliance, fund implementation, document review, etc. Their co-founder and Chief Legal Officer is a 20-year startup law veteran.

  • Established

    2014

  • Country Available

    Worldwide

  • Assets Managed

    n/a

How You’re Taxed

Capital Gains

Capital Gains

Income Tax

Income Tax

Profits earned from investing in startups are taxed like stocks. Investors are subject to short-term capital gains when selling investments held for less than a year, which are taxed at ordinary income tax rates. Long-term capital gains are applicable when investments are held for a year or more with tax rates ranging from 0% to 20%, depending on your total taxable income.

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