How to invest in private companies with Forge: A buyer’s guide

Investing in private companies—especially pre-IPO unicorns—offers a unique opportunity to participate in the growth of innovative ventures before they reach the public market. Forge provides a marketplace that enables investors to access these opportunities with transparency and efficiency. The following is a comprehensive guide to investing in private companies with Forge.

Why consider pre-IPO investing with Forge?

Investing in private companies offers the potential to:

• Access high-growth opportunities: Invest in companies that are shaping the future across various sectors.
• Diversify your portfolio: Add uncorrelated assets that can enhance your investment strategy.
• Realize outsized returns: Early investment in promising, high-growth companies can lead to potentially significant gains.​

Step 1: Create a Forge account

Creating a Forge account is the first step in your private market investment journey. You can create an account for free in minutes.

Step 2: Qualify as an accredited investor

To participate in private market investments through Forge, you must meet the criteria of an accredited investor, which includes:

• Income: Earning over $200,000 individually (or $300,000 with a spouse or partner) in each of the past two years, with the reasonable expectation of maintaining this income for the current year.
• Net Worth: Having a net worth exceeding $1 million, excluding your primary residence (individually or with a spouse or partner). 
• Professional Credentials: Holding a FINRA Series 7, 65, or 82 license in good standing.

Once your accredited status is verified, you can gain access to Forge's marketplace and explore investment opportunities.

Step 3: Explore investment opportunities

Forge provides tools and data to help you make informed investment decisions:​ 

• Company research: Browse and analyze private companies, review their financials, valuations, and market positions.
• Forge Price™: Utilize Forge's proprietary pricing model that offers daily indicative prices for approximately 200 venture-backed, pre-IPO companies, derived from secondary market transactions, funding rounds, and market interest
• Private market indices: Track performance through indices like the Forge Private Market Index (FPMI) and the Forge Accuidity Private Market Index (FAPMI), which monitors late-stage, venture-backed companies.

Step 4: Indicate interest and engage with specialists

When you identify a company of interest that you want to invest in, you can:​

Step 5: Complete the transaction

Forge helps facilitate the transaction process, ensuring compliance and efficiency:​

• Documentation: Sign all required agreements and disclosures.
• Payment: Transfer funds securely through the platform.
• Share transfer: Forge coordinates with the desired private company and other third parties as needed to complete the share transfer.​

Forge's experience with private company transactions and knowledge of applicable securities laws offers a smooth transaction experience.

Considerations and risks you should be aware of

Investing in private companies involves certain risks:​ 

• Liquidity: Private shares can be less liquid than public stocks and selling them may take more time.
• Valuation uncertainty: Determining the value of private shares can be challenging due to limited information. Thankfully, as noted above, Forge offers Forge Price-a derived pricing dataset designed to provide an up-to-date, indicative view of price performance for approximately 200 venture-backed, pre-IPO companies. Using a robust methodology that incorporates recent funding round data, secondary market activity, deal history, and platform interest, Forge Price offers a unique window into private company valuations—insights that have traditionally been hard to access or interpret.
• Regulatory compliance: Investors should understand and comply with all relevant regulations and restrictions.

Forge provides resources and support to help you navigate these considerations; however, investors should further consult their personal legal and/or tax advisors, as needed.

Start your investment journey

Ready to explore private market investments?​

Investing in private companies through Forge opens the door to a dynamic and historically hard-to-access asset class. With robust tools like Forge Price, in-depth company research, and expert guidance from our personnel, Forge equips investors with the transparency they need to explore pre-IPO opportunities with confidence. While private market investing comes with unique risks, Forge’s platform is designed to streamline the process, reduce friction and support informed decision-making. Whether you're looking to diversify your portfolio or gain exposure to tomorrow’s potential market leaders, Forge provides a comprehensive and trusted pathway to private market investing./p>