What is Forge Price?
In the evolving landscape of private markets, transparency and accuracy are paramount. That’s why we developed Forge Price™—a company-specific indicative price for over 240 pre-IPO venture-backed late-stage companies, calculated daily. Forge Price is designed to enhance pricing transparency in a historically opaque market. Whether marking positions, valuing portfolios, or calculating performance, Forge Price can be a critical tool for investors participating in the private market.
What is Forge Price? How do I interpret Forge Price?
Forge Price is a proprietary indicative price, calculated daily, for over 240 pre-IPO technology companies. It represents a single, derived share price for each company, utilizing multiple data sources. It serves as an indicator of the most current price per share of a company based on a combination of secondary market transactions, recent funding rounds, and indications of interest on Forge. Forge Price provides faster and more frequent pricing updates compared to other standalone sources such as primary funding round prices and mutual fund marks.
Methodology: How do we calculate Forge Price?
Forge Price is calculated based on a proprietary model incorporating pricing inputs from primary funding round information, secondary market transactions and indications of interest (IOIs) on Forge.
Data Inputs:
- Secondary Market Transactions: Historical market data from Forge Securities LLC and data collected from other private market trading platforms.
- Primary Funding Rounds: Certificate of Incorporation (COI)-based primary funding round information.
- Indications of Interest (IOIs): Forge’s active interest book reflecting current investor demand and shareholder supply.
Data Cleansing and Enrichment:
Data inputs are incorporated into a proprietary model that assesses the data source hierarchy and recency to create accurate and reliable pricing indicators for the private market.
Output
The output is a daily time series of Forge Prices for over 240 companies across 11 sectors, a standard — offering an up-to-date and comprehensive indication of private market sentiment in each company.
Why do certain companies have Forge Price and not others?
Forge Price availability for a company depends on multiple factors:
- Company Status: Forge Price covers primarily late-stage venture-backed companies with activity in the private market.
- Data Availability: Companies must have sufficient data from secondary transactions, funding rounds, and indications of interest to calculate a Forge Price.
Forge Price coverage is continuously expanding as new companies become eligible based on the above factors.
Conclusion
Forge Price represents a significant advancement in Forge’s suite of private market offerings, providing a more transparent, accurate, and actionable view of company sentiment. By leveraging a robust methodology and frequent updates, it supports valuation, indexing, and benchmarking needs, helping investors navigate the complexities of private company pricing and valuations with greater precision.
Forge Price FAQs
Why did we create Forge Price?
Forge Price was developed to address the lack of transparency and frequent updates in private market pricing. Traditionally, pricing for private companies was derived from funding rounds or outdated mutual fund marks, leading to infrequent and sometimes unreliable pricing information.
Forge Price aims to:
- Enhance Transparency: By providing daily pricing data, it offers a clearer view of the market price of private companies.
- Improve Accuracy: It integrates various data inputs to reflect a more accurate and up-to-date share price.
- Inform Investment Decisions: With more frequent and reliable data, it can help investors make better-informed decisions regarding their investments in private markets.
Reasons to Use Forge Price: Valuation, Indexing, and Benchmarking
Forge Price supports several key use cases:
- Implied Valuation: It provides a unified price for each company, helping to simplify the valuation process for investors and enabling more accurate portfolio assessments.
- Indexing: Customized index solutions can be developed using Forge Price, offering benchmarks that reflect current market conditions and trends in private markets.
- Benchmarking: With daily updates and broad sector coverage, Forge Price facilitates comparison and benchmarking against industry standards.
How to integrate Forge Price and Forge Data into your workflow?
- Web Application
- Forge Pro and Forge Intelligence are interactive web-based applications that visualize trading activity in the private market and provide investors with a detailed view into private market activity.
- API
- Investors and financial institutions can integrate the Forge Data API – with same-day trade pricing, indications of interest, valuations, and more – into their existing investment, portfolio management, and risk analysis tools.
- File Based
- Forge’s proprietary datasets, like Forge Price, are also available in a file-based format for investors and financial institutions seeking to integrate within their existing investment processes and systems.
How does Forge Price compare to Last Closed Trade and VWAP?
Forge Price incorporates the most recent private market activity including active indications of interest on Forge and recent primary round information. Last Closed Trade price is the most recent pricing of the most recent closed trade. And Volume Weighted Average Price is the 90-day average of all closed trades in a single issuer. Forge Price can and often does differ from Last Closed Trade Price and Volume Weighted Average Price (VWAP), for instance if the Last Closed Trade or trades were completed before a primary funding round closed, or if indications of interest have moved up or down since the last closed trades.
