Forge Co-founders Raise $5 Million for New Investing Startup

Forge Co-founders Launch New Venture, D/XYZ

Sohail Prasad and Samvit Ramadurgam, the individuals behind Forge, initially connected during the 2012 summer program at Y Combinator. They subsequently established Forge, a platform facilitating the buying and selling of private company shares for accredited investors and institutions, recently securing $150 million in funding during May.

Forge's Growth and Acquisition

Originally operating as Equidate, Forge has experienced substantial growth alongside the increasing demand for private company shares. Since its launch in 2014, the company has amassed a total of $250 million in funding.

Investors include prominent entities such as Deutsche Börse, Temasek, Wells Fargo, BNP Paribas, and Munich Re. Last year, Forge strategically acquired SharesPost for $160 million in a cash and stock transaction.

Currently, the company manages assets under custody exceeding $14 billion.

Transition to D/XYZ

Prasad and Ramadurgam, instrumental in recruiting Kelly Rodriques as Forge CEO in 2018, express enthusiasm for the company’s achievements. They maintain ownership stakes and continue as nonvoting board members.

Following an 18-month period as co-presidents during Rodriques’s initial tenure, they departed early last year to develop a new concept. This new venture, according to Prasad, aims to broaden access to private company shares for a significantly larger investor base.

Introducing D/XYZ: Democratizing Access

Dubbed D/XYZ (pronounced “Destiny”), the project intends to empower all investors – not solely the wealthiest – to invest in startups whose products and services they utilize and appreciate.

The founders are currently limiting detailed disclosures, but Prasad clarifies that D/XYZ is neither a new fund nor a crowdfunding platform. Furthermore, the company is not involved in the issuance of any tokens.

Instead, Prasad suggests a completely novel product, emphasizing the need for regulatory approval and a defined market entry strategy before revealing more details.

Seed Funding and Key Investors

The duo has successfully raised $5 million in seed funding from a diverse group of founders who support the vision of simplifying access to private company shares for their families, friends, customers, and partners.

Notable participants in this funding round include Coinbase co-founder Fred Ehrsam, Plaid co-founder and CEO Zach Perret, Quora and Expo co-founder Charlie Cheever, Superhuman founder and CEO Rahul Vohra, and serial entrepreneur Siqi Chen, founder of Runway.

Competitive Landscape

Prasad remains unconcerned regarding potential competition. When questioned about Carta, a well-funded company focused on stock and option management for private companies and employees, he identifies it as a direct competitor to Forge.

He notes that both Forge and Carta primarily serve companies, rather than individual investors.

SPACs as a Partial Solution

Regarding Special Purpose Acquisition Companies (SPACs), which accelerate the transition of private companies to the public market, Prasad acknowledges them as a partial solution.

However, he views SPACs as an indication of demand for access to late-stage private technology companies, with investors entrusting funds to SPAC managers in hopes of identifying promising merger candidates within a two-year timeframe. He characterizes them as an “added layer of complexity.”

Potential Synergy with Forge

The question arises whether Forge might view D/XYZ as a collaborator or competitor if the new venture proves successful. Could the technology be re-integrated into Forge, or might Forge perceive a threat to its core business?

Prasad asserts that their current efforts are not competitive, framing it as a continuation of their previous work. He explains that Forge concentrates on trading, custody, company solutions, and data – essentially providing the foundational infrastructure.

This infrastructure, he believes, now enables the development of further innovative applications.

When asked about potential collaboration with Forge, Prasad offers a cautious response, stating “potentially.”

Further developments are anticipated.