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As more startups stay private longer, the secondary market will become crowded with private-equity marketplaces that tout their ability to provide liquidity to their customers. However, while there are several players in the secondary-market space, there’s only one company that provides market-leading services that range from providing liquidity to offering transparent custodial services — that company is Forge.

In fact, Forge has taken an unprecedented approach to support the private market and will revolutionize how investors, institutions, companies, and shareholders unlock liquidity. Shortly after announcing its rebrand, and the expansion of its Series B funding to $85 million, the firm is proud to announce that it has acquired IRA Services (pending regulatory approval).

The acquisition of IRA Services will enhance Forge’s ability to serve private-market investors by providing transparent, efficient, and secure custody solutions. As a result of this alliance, Forge will now be able to provide investors with an integrated investing experience who want to hold assets with an independent third-party custodian. 

Forge Adds Safe, Secure, Custody to its Market-leading Capabilities


Today private companies and institutional investors need a partner who offers comprehensive services — including asset management, access to trading and investment opportunities in the private market, and a custody solution. IRA Services was the natural choice to be that custody solution. The company has built a solid reputation over the last 40 years as one of the leading providers of custody and administrative services for individual investors, financial advisors, asset sponsors, and financial institutions.

Additionally, IRA Services’ capabilities seamlessly fit into Forge’s mission, which is to serve the on-going liquidity needs of the private market economy by forging new connections through its technology, data, and a global set of relationships.

Since its inception in 2014, Forge has delivered on that mission and has emerged as the leading liquidity-solution provider for companies and shareholders, and secondary marketplace for institutions and investors that want access to pre-IPO companies. With the acquisition of IRA Services, Forge can better serve the on-going liquidity needs of the private market economy by empowering companies, investors, and institutions with liquidity, and providing safe, secure, transparent custodial services.

“Recognizing that the private markets seed innovation, our mission is to serve the ongoing liquidity needs of the private-market economy,” said Forge CEO Kelly Rodriques. “In joining with IRA Services, Forge will expand its ability to meet the needs of private-market investors by providing an integrated custodial solution that allows them to seamlessly and securely invest in a wide range of innovation companies.”  

Existing IRA Services customers will not see a disruption in service, and IRA Services will continue to be the custodian of their assets.

“Investors across asset classes want the ease, transparency, and security provided by a seamless investing experience from trading through to settlement to custody,” said Pat Hughes, President of IRA Services. “In bringing together Forge and IRA Services, we look to deliver an unparalleled end-to-end investing experience for private markets investors.”

IRA Services customers will also value having efficient access to the private equity market that has become the core of Forge’s existing business.

Forge Acquires IRA Services to Provide Enhanced Custody Services  

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Press Article: Forge Acquires IRA Services

Forge Acquires IRA Services to Provide Enhanced Custody Services

Deal Expands and Accelerates Forge’s Trading, Custody, Data and Company Solutions to Bring More Liquidity and Transparency to Private Markets

Forge Global and SharesPost, Inc., preeminent private securities marketplaces, announced today they have signed an agreement to merge, pending regulatory approval and customary closing conditions. Together, the two companies will create one of the largest global private securities marketplaces, bringing liquidity and transparency at scale to pre-IPO companies and investors. 

Combined the two companies have facilitated thousands of transactions, resulting in more than $6 billion in private market transaction volume, for hundreds of private companies. Together, the companies have a combined customer base of more than 1 million and will strengthen their comprehensive and scalable technology platform, furthering the combined entity’s position as a leading source of historical private market trade data.

“We see the world of rapidly evolving capital solutions that keep pace with the evolutionary magnitude that innovation companies are driving in the global economy,” said Kelly Rodriques, CEO of Forge. “SharesPost has been a trailblazer in the industry; joining forces will greatly benefit our customers, as well as accelerate and expand our capabilities as the operating system for private market transactions. Ultimately, we will deliver more mission critical infrastructure for our customers than any other private market operator in the world.”

With this deal, the combined company will be strongly positioned to serve the unique needs of both Retail and Institutional investors across the globe. The combined platforms will provide buyers and sellers with deeper insight on private company trends, as well as bid, offer, and pricing data that provides transparency to clients and partners to better understand and engage in the private markets.

“We launched SharesPost a decade ago with the mission of creating a far more efficient, more liquid capital market to support entrepreneurs and their companies,” said Greg Brogger, Founder and CEO of SharesPost. “By combining these two companies, we believe we create a leader in the private markets and complete our mission.”

Rodriques will continue as CEO of the combined entity under Forge Global, Inc. SharesPost founder and CEO Greg Brogger will step down from his current role, but will continue to advise the combined company as a member of the Forge Board of Directors. Forge will maintain offices in San Francisco, New York, San Carlos, South Dakota and Hong Kong. SharesPost’s investment advisor and certain other subsidiaries will be excluded from the transaction and will continue to operate independent of the combined companies.

Financial Technology Partners (“FT Partners”) served as exclusive financial and strategic advisor to Forge and its Board of Directors in this transaction.

As private market innovators, Forge serves the complex and emerging needs of the private market ecosystem by forging new connections through our technology, data and expertise. Founded in 2014, the firm empowers investors and shareholders by enabling liquidity in the private markets. Forge was founded by Y Combinator alumni and backed by top Silicon Valley investors and large, global institutions including Peter Thiel, Draper Associates, Munich Re, BNP Paribas, Deutsche Börse and TD Ameritrade. 

SharesPost launched the first secondary market for private tech company shares in 2009 and built the leading platform for secondary transactions. SharesPost provides the private growth asset class with a suite of trading solutions and investment solutions to facilitate shareholder liquidity. SharesPost has trading operations in San Francisco and New York City.

SharesPost Financial Corporation, an SEC registered broker-dealer and a member of FINRA and SIPC, and SP Investments Management, LLC, an SEC registered investment adviser, are wholly owned subsidiaries of SharesPost Inc. Certain affiliates of these entities may act as principals in such transactions. Investing in private company securities is appropriate only for those investors who can tolerate a high degree of risk and do not require a liquid investment.

Forge and SharesPost Join Forces to Create Powerhouse Global Private Securities Marketplace 

Press Article: Forge and SharesPost Join Forces

Forge Global and SharesPost, Inc., preeminent private securities marketplaces, have signed an agreement to merge, pending regulatory approval and customary closing conditions. Together, the two companies will create one of the largest global private securities marketplaces, bringing liquidity and transparency at scale to pre-IPO companies and investors. 

Forge Global and SharesPost Merge

The evolution of the private market ecosystem continues to evolve, and the demand for a suite of products, services, and expertise to satisfy the needs of companies, shareholders, investors, and institutions is constant. Forge is on the cutting-edge of that evolution and has made key additions to its senior leadership team and board of directors to support this demand. 

Forge is proud to announce Marco Della Torre has joined the executive team as SVP of Technology and Asif Hiriji has joined Forge’s Board, adding more depth of expertise to the company’s already prestigious leadership. Both bring a wealth of financial technology experience to the team and will play critical roles in the growth and development of the company. 

“It’s an exciting time to welcome Marco and Asiff — they bring incredible perspectives and experience to the Forge team,” said CEO of Forge, Kelly Rodriques. “We’re at a critical point as a company and as the industry continues to transform, we will require leaders like Marco, along with the expertise Asiff brings to expand Forge’s global footprint and to continue to meet the needs of stakeholders.” 

New Executive Offers Extensive Expertise in Tech


As the SVP of Technology, Della Torre will lead product, design and engineering teams across the globe. Della Torre is a serial entrepreneur and technology executive who has built world-class technology teams and launched leading software platforms across the healthcare, sports, and automotive industries.

Prior to joining Forge, he served as CTO of Derive Systems, where he led the creation of their automotive technology platform and its rapid expansion. Della Torre was also the co-founder of Basis Science, a Norwest- and DCM-backed digital health platform startup, before selling the company to Intel Corporation. At Intel, he served in business development and lead technologist positions — launching product-driven partnerships with some of the world’s top brands, from Red Bull to the NBA and more.

“The incredible momentum already evident at this early stage of the private market makes this an extremely exciting time to be joining the team at Forge,” said Della Torre. “I look forward to bringing my experience to help further drive Forge’s leadership in this space.”

Asiff Hirji joins the team as Forge’s newest board member. He is the former President and Chief Operating Officer of Coinbase where he ran the company’s day-to-day activities, launching new products and ultimately scaling Coinbase over 40 times in volume and $1 billion in revenue. Hirji is an experienced private equity and venture capital investor and advisor, having held leadership roles at several top firms, including Andreessen Horowitz, TPG Capital, and TDAmeritrade to name a few.

“Forge has established itself as an innovator and a leader in the market,” said Hirji. “I am honored to be joining the Board of Directors and to work with Kelly and the team to further build on the company’s global momentum.”

In their new roles, Della Torre and Hirji will leverage their extensive backgrounds to drive momentum for Forge within the industry. They are poised to take Forge’s versatile customer and product portfolio and expand it even further to meet increased demand from investors, the private markets and the financial services sector.

This announcement builds on the company’s recent momentum. In November, Forge appointed the first chief revenue officer, Jose Cobos to lead growth initiatives across Forge’s expanding product and partner portfolio. 

Forge Expands Leadership With Veteran Finance and Tech Leaders Adding New SVP of Tech and New Board Member

Press Article: Forge Expands Leadership

Forge Expands Leadership

We make discovery in the private markets accessible and opportunities endless. With our robust online marketplace platform, qualified investors get direct and free access to data and information on private tech companies. We’re here to accelerate your possibilities.

Sign up and stay informed. We keep qualified investors informed of immediate opportunities. 

Register today and see how we can help you gain access to the information you’ve been looking for.

Forge Platform

We make discovery in the private markets accessible and opportunities endless. With our robust online marketplace platform you get direct and free access to data and information on private tech companies and their securities. We’re here to accelerate your options. If you want to know pricing, company valuations, and what’s been raised, our online marketplace is what you’ve been looking for. Our marketplace gives clarity to both buyers and sellers so that everyone can better understand, engage, and trade private equity with confidence. We take an active role in matching buyers and sellers when accredited individual investors express interest on our platform.

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At Forge, we foster camaraderie. Our culture is built around a spirit of fun, friendship, and community. We care for and respect each other, and embrace diversity by celebrating different perspectives, skills, and experiences.

We’re a team of agile professionals who accelerate private market innovation to meet the emerging needs of the market ecosystem through technology, data, and expertise.

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Perspectives Gateway

Company propelled by growing interest in private markets adds industry veterans from EquityZen and SharesPost to leadership team

Forge Global, Inc. (“Forge”), today announced it has hit a significant milestone, completing more than $8.8 billion in transaction volume. The company completed more than 1,200 trades in Q3, breaking a single quarter record and doubling the number of transactions from Q3 2019. Forge, after completing its merger with SharesPost in November, recorded 95 percent quarter-over-quarter revenue growth, including data from both brands, and has now facilitated the trading of private shares across more than 360 issuers since its inception.

Forge’s mission is to unlock the private markets for the mutual benefit of investors, equity holders and fast-growing private companies. There are now more than 500 private unicorn companies globally with a total valuation of $1.6 trillion as of December 2020. The number of newly minted unicorns continues to rise, far outpacing the number of exits as companies stay private longer. That delta – along with the improved capabilities and traction of Forge – has led to a surge in companies actively participating in the trading of equity through the private markets as a means to get liquidity for shareholders and employees prior to an exit. An increase in capital flooding into the private market signals a significant increase in investor interest in these high-growth, high-value unicorn companies. Currently there is more than $12 billion in volume listed on the combined platforms.

“The growth that private markets have experienced this year has been explosive and it’s been exciting to ride that wave,” said Kelly Rodriques, CEO of Forge. “Companies and investors are hungry for a marketplace where they can find the best price with the best execution, and we have that. Forge has rich data, an incredible team with deep expertise in facilitating private market transactions and advising innovative founders on raising capital, and the platform that makes accessing and trading in this once-elusive asset class a frictionless experience. We’re looking forward to building on a pivotal year for the market and our company.”

Forge welcomed new leaders to the team from EquityZen and SharesPost, adding to a stellar team that is poised to transform the global markets through data, technology and deep knowledge of the private markets. Forge also expanded its global footprint and now has more than 200 employees across Dubai, San Francisco, Singapore, New York and Hong Kong. Notable new hires include:

Shriram Bhashyam co-founder of EquityZen, joins the team as Senior Vice President of Business Development. Bhashyam left EquityZen early last year and most recently has been an entrepreneur in residence with Citi Ventures.

Nick Grabowski joins Forge as Chief Technology Officer from SharesPost where he served in the same position and led the engineering, DevOps, and product development teams. Prior to SharesPost, Nick was Vice President of Application Architecture and R&D at Charles Schwab & Co, where he led the design of their application modernization efforts.

Jennifer Phillips joins Forge as President & Head of Private Securities from SharePost where she was the President and co-founder of SharesPost Financial Corporation, heading the broker-dealer for six of her eight year tenure. Prior to SharesPost, Jennifer worked for Silver Lake Waterman and New Evolution Ventures, analyzing and working on portfolio investments.

Chris Setaro joins Forge as Senior Vice President, Head of Global Risk from SharesPost where he served as the Global Chief Compliance Officer. Before joining SharesPost, Chris was Chief Compliance Officer for Nasdaq, Inc.’s five U.S. broker-dealer subsidiaries whose businesses included equities and options routing, U.S. Treasury securities trading, private company liquidity programs and issuer advisory services.

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Forge Sees Record Quarter with More Than 1,200 Trades, Hits $8.8B in Transaction Volume

Press Article: Forge Sees Record Quarter with More Than 1,200 Trades, Hits $8.8B in Transaction Volume

Forge Global "Forge" hit a significant milestone, completing more than $8.8 billion in transaction volume. The company completed more than 1,200 trades in Q3, breaking a single quarter record and doubling the number of transactions from Q3 2019. Forge, after completing its merger with SharesPost in November, recorded 95 percent quarter-over-quarter revenue growth, including data from both brands, and has now facilitated the trading of private shares across more than 360 issuers since its inception.

Our commitment to a richer future starts with our own people.

At Forge, we share a common passion and commitment to our mission. We believe in the work we do and pride ourselves on our culture of praise and resiliency. 

We learn and grow from yesterday while celebrating milestones and wins. Together, we build and drive change, not only inside our own walls but beyond them. We support innovation and encourage entrepreneurship. We forge connections and relationships, creating an enriched future for all.

We are Forge: Company Manifesto

Our Manifesto

We are driven by our shared values and put team before self. We are bold. We are accountable. We are humble. Our values support our strengths and form the cultural foundation of how we innovate and work to make the world a better place for all. 

Cody
Carter

Alexis 
Lyon

Brian 
Coyle

Francis 
Keep

Chris 
Blewitt

Brendan 
Pinder

Josh 
Manley

Russ 
Wood

Sandra 
Wu

Norbert 
Ngethe

JP 
Teutonico

Trish 
Gomez

Jocelyn 
Refo

Ian 
Duncan

Keith 
Richardson

Kelli
Frostad

Alex
Rabinovich

Andrew
Cole

Dave
Kasouf

Jacob
Butcher

And, we applaud the practice of our values too

We bring our full selves to work each day.

Whether we’re in the office, remote or on the road, we work collaboratively across teams to drive initiatives to build and improve products. We learn, we grow, we make an impact. Together.

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At Forge, we share a common passion and commitment to our mission. We believe in the work we do and pride ourselves on our culture of praise and resiliency. 

We learn and grow from yesterday while celebrating milestones and wins. Together, we build and drive change, not only inside our own walls but beyond them. We support innovation and encourage entrepreneurship. We forge connections and relationships, creating an enriched future for all.

Funding reflects the company’s leadership position in providing on-going liquidity to shareholders and investors in private innovation companies around the globe 

Forge, a leading marketplace for pre-IPO securities, formerly called Equidate Inc., today announced a complete rebrand along with an expansion of its Series B funding round. The increased funding round to $85 million reflects the growth potential of the firm as the private markets expand globally and its range of services increases. This announcement follows a period of rapid growth, the hiring of new industry veterans to its C-Suite, and the completion of over $1 billion in transactions. 

Today, over 250 private companies globally have valuations at or above $1 billion – as companies stay private longer than in the past driven by the availability of capital and shifting regulatory frameworks. The on-going growth in the private markets is substantially bolstering the demand for transparent, liquid, and secure access to innovation companies across a range of industries. 

Forge has traditionally focused on its core platform, which enables trading in pre-IPO company shares, and where the firm has facilitated over $1 billion in transaction volume in companies based in the U.S. and abroad. Under its new brand, Forge will expand the range of services it offers to companies, investors, and strategic partners to help expand access to the private markets. 

The latest funding round was led by German reinsurance giant Munich Re. “Munich Re originally partnered with Forge in 2015, leveraging its global insurance expertise to help further enable the rapidly growing market for pre-IPO equity. We have been pleased with the partnership,” said Dr. Peter Roeder, Member of the Board of Management at Munich Re. “We are excited to become a strategic investor in the firm and demonstrate our support of Forge’s enabling secure and transparent access to the private markets.” 

The firm was initially funded by leading technology investors Peter Thiel and Tim Draper. Regarding his investment, Mr. Draper said, “Startups are staying private longer and raising more money than ever. Employees want liquidity for the blood, sweat, and tears they’ve invested in their companies and companies want to give it to them. Meanwhile, investors want access to the growth and value these companies are creating. It’s the perfect storm for Forge to come in and provide investors with access, employees with liquidity, and companies with a way to make this happen. Everybody wins.”

Kelly Rodriques, CEO, Forge said, “Our vision is to enable private companies and their employees to better manage liquidity across multiple funding events and to forge new connections between our clients through our technology, data, and global set of relationships. Our new brand aims to speak more directly to this core value proposition.” 

Today’s announcements build on a string of milestones in the last six months, including the hiring of a veteran CEO and CFO and the launch of an industry-first index tracker and accompanying fund. The Forge Tech30 Capped Index tracks the valuations of Uber, Airbnb, SpaceX, and an additional 27 of the largest U.S. private technology companies while the EQUIAM Private Tech30 Fund, based on the index, provides investors with diversified access to these companies. 

Forge is a premier trading and settlement partner for a wide range of investors in the private markets. Established in 2014 as Equidate Inc., the company empowers investors and shareholders by enabling liquidity in the private markets. Forge was founded by Y Combinator alumni and backed by top investors including Tim Draper, FT Partners, and Munich Re. Forge’s platform allows shareholders and investors in privately held innovation firms to liquidate a portion of their shares and provides private and institutional investors access to top companies like Spotify, Lyft and 23andMe before their IPO. 

Equidate Inc. Rebrands as Forge, Increases Series B Funding Round to $85M, and Completes $1B in Pre-IPO Trading Volume

Press Article: Equidate Inc. Rebrands as Forge

Forge, a leading marketplace for pre-IPO securities, formerly called Equidate Inc., announced a complete rebrand along with an expansion of its Series B funding round. The increased funding round to $85 million reflects the growth potential of the firm as the private markets expand globally and its range of services increases. This announcement follows a period of rapid growth, the hiring of new industry veterans to its C-Suite, and the completion of over $1 billion in transactions. 

Equidate Inc. Rebrands as Forge

Forge Global, Inc. (“Forge”), has completed its merger with SharesPost, establishing one of the leading global private securities marketplaces serving the liquidity needs of high-growth unicorn companies and their employees and connecting investors to private market investment opportunities. 

Through the merger, advised by FT Partners, Forge expands its ability to provide liquidity and transparency to the private markets at scale and accelerates its position as a leading source of historical private market data for private companies and investors. The combined entity has facilitated thousands of trades, resulting in more than $7.74 billion in private market transaction volume, for hundreds of private companies. Forge now serves a combined customer base of more than 1 million.

“Forge is in an incredible position, as more companies and investors take advantage of the rapidly advancing opportunities in the private markets. Companies are able to stay private longer, enables price discovery and smoothly transition to the public markets, while investors receive access to unicorn stocks and benefit from companies’ pre-IPO growth phases,” said Kelly Rodriques, CEO of Forge. “Through this merger, we are building on our robust technology platform and deep expertise to enhance our marketplace and accelerate support for company liquidity solutions, trust services and data offerings to help companies and investors better understand trends and pricing so they can make decisions that benefit them.”

Forge will expand its current platform, improving the marketplace with more pricing data, providing private companies with a more efficient, and a more discreet and systematic way of offering liquidity and option financing solutions to equity holders, in addition to providing institutional quality custody of non-traded assets to ensure compliance with regulatory requirements for taxable and tax-advantaged accounts. Future platform offerings will focus on the company’s ability to provide key insights on private-market trends.

As private market innovators, Forge serves the complex and emerging needs of the private market ecosystem by forging new connections through our technology, data and expertise. Founded in 2014, the firm empowers investors and shareholders by enabling liquidity in the private markets. Forge was founded by Y Combinator alumni and backed by top Silicon Valley investors and large, global institutions including Peter Thiel, FT Partners, Draper Associates, Munich Re, BNP Paribas, Deutsche Börse.

Forge Completes Merger with SharesPost, Showcasing Unprecedented Depth of Private Market Data

Press Article: Forge Completes Merger with SharesPost

Forge Global, Inc. (“Forge”), has completed its merger with SharesPost, establishing one of the leading global private securities marketplaces serving the liquidity needs of high-growth unicorn companies and their employees and connecting investors to private market investment opportunities. Through the merger, advised by FT Partners, Forge expands its ability to provide liquidity and transparency to the private markets at scale and accelerates its position as a leading source of historical private market data for private companies and investors. The combined entity has facilitated thousands of trades, resulting in more than $7.74 billion in private market transaction volume, for hundreds of private companies. Forge now serves a combined customer base of more than 1 million.

Forge Completes Merger with SharesPost

At Forge, we offer extensive opportunities for growth to provide employees with endless possibilities, developing careers through unique experiences. 

The diversity of skills, experience, and thought is what drives innovation within our walls. If you have lofty goals, towering aspirations, and a desire to revolutionize the industry, then Forge wants you. Explore our current openings and if something resonates, we’d love to hear from you. 

San Francisco, CA

Vice President of Product Design

Senior Software Engineer

People Operations Director

Sioux Falls, SD / Forge Trust

Compliance Director

We offer competitive compensation, benefits, and perks so our people can thrive.

We’re always looking for talented people. 

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Job Opportunities. Extensive opportunities for growth that provides employees with endless possibilities, developing careers through unique experiences.

Extensive Job Opportunities for growth and development

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Working at a Startup? Take Time to Understand Salary vs Equity

The attraction of working at a startup is hard to ignore. Working for these types of companies is alluring because employees can have a direct impact on the company’s product suite, mission, and future. It’s also exciting to work for a rapidly growing startup not only because of the day-to-day problem solving, but also for the opportunity to gain equity in the company.
If a startup is successful and grows its valuation, then an employee’s equity will also appreciate. The success of the startups is important to employees because they often accept a reduced annual salary in favor of more equity in the company. The hope is that the company will do well, which will buoy their shares’ value. 
Some prospective startup employees may be surprised by the tradeoff in salary versus equity, but all of the information is included in an employment offer letter. Oftentimes, the letter outlines the granted first-market value on the grant date and vesting information.

Here is a more comprehensive look at what employees need to know about salary versus equity.

The advantage of working for a liquid salary is that an employee will know exactly how much money they will receive as a base salary and can estimate for bonuses — cash payment is easier to anticipate than equity. 

The bonus will be less predictable at smaller companies, but sometimes a target bonus is provided in the offer. Sign-on bonuses are an additional incentive for employees to switch to a new job. They’re given at the time to compensate for relocation or other inconvenience expenses a new employee may encounter.

If employees sign on to work with a startup, chances are they’ll receive equity from the company. This means the employee will own private shares of the company and can liquidate their shares if and when the need arises. The company will compensate its employees with equity in the form of a stock option plan. Company-granted options will give employees access to buy a fixed number of shares at the market price from the time of the grant. 

Typically, standard options are subject to four-year vesting with one-year cliff vesting where 25 percent of the options vest with in the first year (cliff) with the remaining 75 percent vesting proportionally on a monthly basis over the next four years. Even though employees are tied to the company for the vesting period, they will profit if the shares appreciate in the future. 

If employees leave the company before their options have fully vested, then they lose whatever hasn’t vested. However, employees may be able to purchase any vested options within a certain period of time after their termination date. Also, every company has different restrictions on the amount of time employees have to exercise their vested options.

Typically, companies offer ISOs, NSOs, or RSUs.

An ISO (incentive stock option) is exclusively for employees, not outside directors, advisors, partners, or contractors. ISOs are a specific type of option with special tax treatment if everything meets certain requirements. 

ISO Tax Features: In general, ISOs aren’t taxed until the sale of the underlying security for which they were exercised. At that point, the taxable amount is equal to the difference between the sale price and the exercise price. 

Despite this long-term capital gain, ISO exercises can trigger an alternative minimum tax (AMT) upon receipt. An AMT is placed if the tax liability of someone is calculated to be relatively low to their income. In addition, ISOs come with specific rules and requirements that employees must abide by in order to take advantage of the favorable tax treatment, including if an employee holds stock over two years from the grant date and one year from exercise. Selling sooner will result in a “disqualifying disposition” and they will be taxed similarly to NSOs.

An NSO (nonqualified stock option) is an option that doesn’t qualify for ISO treatment. They come with tax disadvantages if an employee waits to exercise. 

NSOs are typically for contractors, board members, and advisors. An ISO turns into an NSO if disqualifying events happen such as “extended exercise period.”

NSO Tax Features: Employees pay ordinary income tax for exercising NSOs and pay taxes for capital gains when they sell shares.

RSUs (restricted stock units) are a commitment to give the value of a specific number of shares after IPO. The settlement can either be in shares or equivalent cash. 

Recipients only become shareholders if they choose settlement via shares. Settlement (via cash or stock) is a taxable event. This almost always occurs after vesting.

RSU Tax Features: The taxable income is the market value of the shares at vesting. Employees with RSUs who choose to become shareholders could benefit from a loan or profit-share forward contract to finance the anticipated taxes on vested RSUs.

Working for equity is higher risk than working for a typical cash income. If employees are working for the next Google, then their stocks will appreciate — making them millionaires when the company goes public.

However, if an employee’s company goes down in value, then their stocks depreciate and they’re at a loss. 

But employees of private startups have the opportunity to sell their private shares on a secondary market before IPO. This helps bring down the risk for employees to work for equity because their assets are not as tied up in the company.

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Perspectives Article: Working at a Startup? Take Time to Understand Salary vs Equity

What are Alternatives for Breaking into the Private Market?

Blackstone Group is in the final stretch of raising its eighth fund, which is going to be the largest Private Equity (PE) fund in history, capped at around $25 billion. Blackstone’s fund represents a changing trend in the PE industry — larger fund sizes.  Although the funds are getting bigger, the returns have been insufficient, causing institutional investors to seek other ways to invest in the private market.

In the case of the Blackstone fund, general partners of Blackstone raised this fund amid high demand from numerous institutional investors, including sovereign-wealth funds, pension funds, and education institutions who have hundreds of millions of dollars to put to work. 

Although the size of Blackstone’s recent fund was enormous, it’s not out of the ordinary. In actuality, it represents a prominent trend in private equity: megafunds. In fact, with Apollo’s 2017 $24.6 billion fund, Advent International’s 2019 $17.5 billion fund, and Vista Partner’s 2018 $16 billion fund, it’s easy to believe this trend is the new norm for PE.

Do Larger Funds Create More Value for Investors?

Even though PE funds have been getting larger, returns have not had a better performance. According to the Wall Street Journal, these megafunds have had subpar performances in recent years, earning returns barely above that of the S&P 500. 

The S&P 500 posted a 14.1 percent return over the past five years, while PE funds over $10 billion posted a mere 14.4 percent return. According to WSJ, this phenomena —  due to large funds having to target bigger, and less numerous, opportunities to deploy capital —  has lessened the desirability of PE for institutional investors. 

With a Changing Climate in Private Equity, What are the Alternatives?

The recent trends in the PE industry, coupled with substantial fees, limited optionality, and illiquidity, have prompted several institutional investors to circumnavigate PE funds and seek a direct role in private market trading. Institutional investors are doing this either through co-investments with PE firms or seeking private market transactions directly, highlighted in a February 2018 BCG Publication.

Given the rise of the pre-IPO securities trading, private markets are now becoming much more liquid for both retail and institutional investors, as discussed in a 2019 McKinsey Industry Primer. With this trend, IPO securities trading is becoming a realistic way for institutional investors to invest in private markets without going through PE funds. For example, BNP Paribas — a French investment bank that has offered private equity investments to its clients since 1998 — has collaborated with Forge to create a structured equity product in pre-IPO companies. The product is the first of its kind in the investment banking industry. 

When discussing the BNP/Forge Partnership, CEO of Forge Kelly Rodriques stated, “We’re bringing cutting-edge financial products to market that provide investors unprecedented access to pre-IPO securities while presenting new options for private companies to raise money and control their financial future.” The announcement follows an increasingly global customer demand for investment opportunities in pre-IPO companies, and this partnership symbolizes the growing demand for institutional investments in Pre-IPO companies.

Granted, smaller PE funds have not faced such a drastic phenomena of sub-par performance compared to megafunds raised in recent years. Nonetheless, substantial fees, complete lack of optionality, unpredictability of capital calls, and the substantial illiquidity of PE is still drawing investors to alternative ways to invest in the private markets.

On the other hand, pre-IPO security trading through marketplaces, such as Forge, offers broad access to the private market, not constrained by opportunity sparsity faced by PE funds. What’s more, pre-IPO trading minimizes constraints present in the private equity industry, including illiquidity and unpredictability of capital calls.

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Private Equity is Changing: What are Alternatives for Breaking into the Private Market?

Perspectives Article: Private Equity is Changing: What are Alternatives for Breaking into the Private Market?

The Lasting Impact of 2020 & 2021 Market Outlook

With all the uncertainty in 2020, some interesting trends emerged that will influence how private unicorns approach the public markets – and when investors choose to participate in unicorn financings – in 2021. 

With COVID-19, massive worldwide protests, and a US election year, attempting a public debut in 2020 was an exercise in patience, luck, and fortitude in some cases. The IPO market stalled as pandemic-driven economic concerns rose earlier this year, with companies such as Airbnb and most recently Affirm and Roblox, delaying IPOs as the spread of coronavirus altered equity markets and decreased investor appetite for new investments. 

The pause was only temporary, however, as alternative pathways to the public markets, particularly SPACs, exploded. Some $73B was raised through SPACs this year, and investment managers are now searching for the next DraftKings or Square to take public. Any technology company with an IPO in its 2-3-year plan is now being inundated with calls from these entities, which has elevated the consideration of this route to market, as compared to prior years.

And even as more companies consider going public by SPAC, a few notable companies added more data points to the direct listing trend. This alternative to traditional IPOs offers a more direct path to the public market that includes employee liquidity without the lockup periods that are standard with the traditional model and may limit the involvement of investment bankers so equity holders retain more of the upside. Direct listings also give tech unicorns more control over their destinies and insight into how to price their offerings based on private market trading activity.

Both Palantir and Asana, which coincidentally went public via direct listing on the same day, chose this route to market in 2020. Many unicorns that are profitable or don’t have an immediate need to raise more money are likely to choose this option in 2021. 

Boosting consideration for the direct listing, the SEC just passed new regulations that would allow companies to go public via direct listing and raise money, too. We anticipate that the direct listing approach will continue to gain traction in 2021 with this news and as unicorns get more data on how other issuers fared. 


Private market growth is not slowing down 

What’s clear is that private market momentum is exploding faster than ever – in fact, there are now more than 500 private unicorn companies globally with a total valuation of $1.6 trillion as of December 2020. Even as more and more unicorns are minted, the pace of new unicorn creation far outpaces the number of unicorns that exit. 



2020's Lasting Impact: 2021 Market Outlook

Unicorn companies that are staying private longer are increasingly turning to the private markets for pre-IPO liquidity as companies and stakeholders ‘test the waters’ on pricing to land at the most accurate price point possible on debut day.

With companies staying private longer comes a growing recognition that investors can’t wait until an IPO if they want to benefit from private companies’ highest-growth periods. We’re anticipating more big partnerships and strategic, outside-of-the-box collaborations from various public and private market players in 2021.

Looking forward, we’ll see capital innovation amplified even further – new ways for investors to participate in the high growth periods that unicorns experience in the lead-up to major exits, as well as new ways for private companies to get value from their existing equity so they can stay private longer, retain employees, and invest in innovation. 

To this, we expect to see new, innovative financial products coming to market that deliver value to high-growth unicorn companies, their equity holders, and investors. This is where we come into play. Forge has rich data, an incredible team, with deep expertise in facilitating private market transactions and advising innovative founders on raising capital. Our robust technology and issuer-focused platform makes accessing and trading in this once-elusive asset class a frictionless experience. 

We’re keeping a close on eye on the challenges and opportunities that 2021 will bring to the private market, and we’re here to answer your questions and help inform your data-driven decisions – so check back in soon. 

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Perspectives Article: 2020's Lasting Impact: 2021 Market Outlook

What Employees Need to Know About Stock Options

In the startup world, particularly when it comes to unicorns, options can be considered the holy grail. They have a bit of mystique and come with stories of early employees becoming millionaires post IPO. However, most people don’t fully understand the mechanics and choices that employees have when it comes to option compensation.

So, let’s break it down: Simply speaking, options are contracts — they aren’t shares. They’re contracts where an employer promises to sell the employee their shares in the future at today’s price. The employer isn’t actually giving the employee the stock as part of their compensation package. Instead, the employee is getting the option to buy the stock at today’s price even though the stock would be more expensive if it was purchased on the open market. 

Some early employees of a startup may become millionaires overnight because they’ll be able to buy the stock for 15 cents a share after waiting until it starts trading for hundreds of dollars.  

Here’s the catch to employee equity: Employees must be patient to access the shares. The employer wants employees to stay and help transform the company into the next big success story.  

Typically, companies make employees wait one year for an option grant to start vesting, and only then will a portion of the grant vest (i.e., become purchasable by the employee) on a monthly basis until the four-year anniversary of the grant date. This option compensation (like most equity comp) is a retention and incentive mechanism.  

After waiting for options to vest, employees can “exercise” their options, which means buying the shares at the price from as far back as 10 years ago and then sell them at today’s price. Even after the options have vested, there are still costs to obtain shares beyond just the exercise price. For example, certain taxes might be owed at the time of exercise. Also, depending on the company, there may be no way to sell the newly acquired shares prior to a company’s IPO or acquisition. However, it’s possible to obtain liquidity from options in other ways through the secondary market.


What Happens When Employees Wait for Their Options to Vest?

When a company gives employees Incentive Stock Options (ISOs) or Nonqualified Stock Options (NSOs), the employee usually has to wait for the options to vest before they’re allowed to exercise them.Once the options have vested, employees have the opportunity to obtain shares, either all at once or periodically as they vest.


In some cases, employees are granted Restricted Stock Units (RSUs). With RSUs the shares are given to the employee at a schedule determined by the company, they do not have to buy them. But, keep in mind that taxable income will be recognized with each release of shares from an RSU.

How to Liquidate Shares Before Your Company IPOs

Some private companies allow employees to sell their shares directly — Forge can help with this process. First, there must be an agreement on price. From there, Forge works to connect a seller of the shares to an interested buyer.


Next, Forge will submit a notification to the company called a Stock Transfer Notice. The notice tells the company to switch ownership from the buyer to the seller. If a switch is approved, then they can make a direct transaction. However, the company usually has a Right of First Refusal (ROFR) to purchase the shares. If the company chooses to exercise its ROFR, then they’ll buy back the shares from the employee. So, the employee still gets liquidity but the original buyer is removed from the deal.


Some companies also require board approval for transfers. In this case, the company has an opportunity to block the transaction. With that said, Forge has standing relationships with several companies as a trusted buyer, and at others — the company’s approval will depend on price and number of shares.

Private Companies Need an Employee Liquidity Solution

With private companies beginning to find it more optimal to delay IPO, demand for employee liquidity may not be met. However, by using platforms like Forge, employees can use the secondary market to buy or sell shares in order to get the liquidity they need.

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Perspectives Article: What Employees Need to Know About Stock Options

What Does it Mean to Be a Unicorn Today and the Impact On Employees

The tech space is rife with “unicorns,” but what does it really mean to be placed in this rarified air? The term has become so ubiquitous that nearly every startup with a large valuation has been added to this category — but there is a distinction. In 2013, venture capitalist Aileen Lee defined unicorns as American software companies valued over $1 billion. 


Although they’re still heavily concentrated in California and $1 billion is still the starting point of valuation, unicorns have expanded both globally and financially. In fact, Chinese unicorns have been rising in value. For example, Bytedance, an international internet company, is currently valued at $75 billion.


Despite the high valuations of these unicorns, a public offering can sometimes put their value at risk. Even the most prominent start-ups have been devalued by billions of dollars through the volatility of the stock market after their IPO. For example, Uber’s shares fell 7.6 percent when they went public. The ride-sharing company’s public debut was recorded as one of the worst performances of an IPO on the first day of trading. 


As a result, it’s optimal for unicorns to stay private longer to establish a more solid valuation. However, staying private could present a challenge for start-up executives — some employees may need liquidity sooner rather than later, which can lead them to look for higher-paying jobs outside of the organization.

Most unicorn employees take lower salaries in exchange for shares in the company. And when an IPO is delayed, the employees’ demand for liquidity is not met — forcing talented workers to leave for a job that will pay them the desired compensation. To keep talent, employers can offer a company-sponsored employee-liquidity program, which allows employees to liquidate their shares on secondary markets.


Company-sponsored liquidity programs allow companies to keep control of their cap tables and give employees liquidity through a spectrum of options. 

One option would be a company-sponsored guided tender, another would be an insured forward contract in order to not impact the company’s 409A. Additionally, implementing liquidity programs can be a boon for unicorns. A liquidity event provides a peek into how the company’s shares are performing in the secondary market, which can inform valuation data.

These types of company-sponsored programs give employees a chance to access liquidity without leaving their company and give unicorns the opportunity to scale their business and grow their valuation on their own terms without Wall Street pressure.

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Perspectives Article: What Does it Mean to Be a Unicorn Today and the Impact On Employees

How Will the Next Recession Affect Unicorns?

The dotcom bubble of the early aughts felled several startups. For example, Pets.com, a San Francisco-based pet supply company, went public in February 2000 at a valuation of over $300 million. Nine months later, the company’s stock price fell from $11 at its IPO to $0.19 at its bankruptcy announcement, making it one of the most notable examples of the dotcom bubble.

Given the record uptick in IPO activity this past quarter — raising more capital than any quarter in five years — economists and investors alike have begun to draw comparisons between the current economic bubble and the dotcom bubble. 

Moreover, with tech companies trading at lofty valuations — Zoom was trading at 69x enterprise value-to-sales in July 2019 compared to an S&P 500 average of 2.21x enterprise value-to-sales — many economists have begun to speculate when the next recession will come and how it will impact unicorns. 

In addition to the uptick in IPO activity in 2019, several other economic indicators suggest a recession is imminent. For example, the yield curve has now been inverted for more than three months. 

This suggests that the long-term outlook is poor as short-term investments have higher yields than longer-term investments — which is a precedent for past recessions over the last 50 years. And, the New York Fed’s recession probability model warns that the current odds of a recession in the next year are as high as they were in July 2007, according to a Forbes report.

Perspectives Article: How Will the Next Recession Affect Unicorns?

Given the record uptick in IPO activity this past quarter — raising more capital than any quarter in five years — economists and investors alike have begun to draw comparisons between the current economic bubble and the dotcom bubble.  Moreover, with tech companies trading at lofty valuations — Zoom was trading at 69x enterprise value-to-sales in July 2019 compared to an S&P 500 average of 2.21x enterprise value-to-sales — many economists have begun to speculate when the next recession will come and how it will impact unicorns. 

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