Another Case Study in Drunken Sailor Spending

Today I'm looking at Forge Global (FRGE). It is a marketplace and data shop for trading private company shares with an IRA custody business on the side.

This stock has seen one of the craziest, wildest rollercoaster rides that I have encountered in my research in these company profiles.

• 52-week low: $6.60 (April 2025)

• 52-week high: $24.90 (August 2025)

The company has seen a material increase in investor confidence but is still losing a ton of money and its cash supply is dwindling.

This type of business has attractive margins but it's facing a lot of tailwinds going forward, including:

• Intense competition from Carta Liquidity, Nasdaq Private Market, and bespoke brokers keeps pricing honest.

• Limited scale. With roughly $90M TTM revenue, you do not get the scale absorption you need for a people heavy, regulated business.

Here are a couple additional factors that make this type of business tough to scale:

• Lumpy demand plus long sales cycles. Programmatic liquidity events and enterprise style deals help, but they do not smooth the curve enough.

• Fragmented supply. Private secondaries are messy. Every cap table is different, which adds friction and cost to each dollar of revenue.

If I could magically redo their business model from day one, here are a couple of things that I would do differently:

• Build data exhaust from day one. Package it into indices or recurring briefs that pull in your ideal buyers.

• Do not rely on a single demand driver. Pair lumpy transactions with recurring revenue so you can survive bad quarters.

• Treat cost discipline as strategy. Design for efficiency so volume growth actually drops to the bottom line.

All in all, the combination of long sales cycles, unique transactions, and increasing competition are going to continue to be headwinds for this business to turn the corner and start to have money fall to the bottom line.

With that, I'll see you tomorrow!

Nick

TL;DR

• Forge runs a marketplace, data business, and IRA custody platform that enable trading in private company shares.

• The business can be high margin on a net revenue basis, but profitability depends on private market activity and cost discipline.

• The practical lesson: pair lumpy transaction revenue with recurring data or custody streams, then use product speed and proprietary data to pull ahead.

• Recent product and partnership moves push Forge from brokerage toward platform, but the moat relies on improving network effects and execution.

The 30,000-Foot View

• What they do and business model
  Forge provides infrastructure for secondary trading of private company stock, sells data subscriptions and indices, and earns administrative fees on cash balances through its IRA custody platform. The engine is a two sided marketplace, wrapped with data products and custody services that smooth volatility.

• Main revenue sources and mix, TTM to 6/30/2025

  • Marketplace revenue: ~57%

  • Custodial administration fees: ~43%
    The mix tilted back toward trading in 2025 after a 2023 slump that leaned on rate driven custody income.

• Key stats, as of late August 2025

  • Market cap: about $258M

  • TTM revenue: about $90.8M

  • TTM gross margin: ~99% on a net revenue basis

  • TTM operating loss: about $68.9M

  • Employees: roughly 300

  • Industry: Capital Markets

Company History

• 2014: Founded as Equidate to facilitate secondary transactions in private tech companies.

• 2020: Merged with SharesPost, combining marketplaces and expanding proprietary data.

• March 2022: Went public via SPAC merger with Motive Capital, started trading as FRGE on NYSE.

• 2024: Expanded index and data offerings, continued to build institutional data positioning.

• April 2025: Executed a 1 for 15 reverse stock split to maintain NYSE compliance.

• June 2025: Launched Next Generation Marketplace with an API first push and announced a Fortune partnership around private market rankings.

Show Me the Money

Stand out financial features

• Very high reported gross margin, ~99%, because Forge reports net revenue after transaction based expenses. Treat this like take rate, not a classic margin.

• Operating losses narrowed each year since 2022, helped by cost control and improving marketplace volumes.

• Cash still exceeds debt, but the cushion has declined as losses and working capital needs draw down liquidity.

• Revenue mix is shifting back to Marketplace, which is healthier than relying on interest rate sensitive custody fees.

Financial Data

The N.O.O.B. Nine — Competitive Powers

The Nerd Out on Business Nine is made up of Hamliton Helmer's famous "7 Powers" of competitive advantage (Scale Economies, Network Economies, Counter-Positioning, Switching Costs, Branding, Cornered Resource, and Process Power) combined with two of my own (Data Flywheel and Distribution Advantage).

Average Score: 2.8/5 - Translation: useful data and marketplace advantages, but not a fortress moat yet.

Memorable Marketing

Approach

• Thought leadership that converts, anchored by proprietary data and indices.

• Product led stories that frame clear before versus after improvements in speed, data, and workflow.

• Earned media and partner distribution over heavy paid budgets.

Campaign snapshots

• Forge Investment Outlook, ongoing

  • Hook: free, recurring private market performance snapshots that make investors smarter in minutes.

  • Channels: email, web, PR.

  • Why it worked: closes an information gap with proprietary data, sets a reliable lead magnet cadence, and positions Forge as the reference source.

  • Result: stronger inbound for data products and higher quality conversations with institutions.

• Next Generation Marketplace launch, 2025

  • Hook: API first trading experience, faster execution, richer data in workflow.

  • Channels: press release, product marketing, sales enablement.

  • Why it worked: ties the launch to pain points customers feel, such as time to close and price discovery.

  • Result: narrative shift from broker to platform, with momentum aligning to improved marketplace revenue.

• Fortune partnership, 2025

  • Hook: co branded lists and rankings powered by Forge data that reach mainstream business audiences.

  • Channels: earned media, partner distribution, social.

  • Why it worked: credibility by association, larger top of funnel without heavy spend.

  • Result: awareness lift and broader consideration for both trading and data offerings.

Tactical takeaways

1. Turn proprietary usage data into public indices and recurring briefs that attract the exact buyers you sell to.

2. Launch around outcomes, for example, speed, fees, time to close, not features.

3. Borrow reach with partner media to expand distribution before you can buy it.

4. Make recurring content your default demand engine and point it to a conversion ready demo or trial.

AI Uses & Opportunities

• Current uses

  • Pricing signals and demand discovery, blending trading activity with non trading datasets to improve quotes and benchmarks.

• Near term ideas to cut costs and boost value

  • Deal matching copilot: model that scores probability of match between bids, asks, and investor mandates, then nudges reps to the next best action.

  • Dynamic pricing and liquidity heatmaps: near real time fair value bands, anomaly detection, and fractured order routing suggestions that compress spreads.

  • KYC and fraud triage: document intelligence and entity resolution to lower onboarding friction and false positives.

  • Research summarization for private names: LLM one pagers that condense filings and signals inside the trading workflow.

  • Data product upsell: AI assisted custom index screens sold as premium, client specific data tiers.

Bumps in the Road

• Sustained losses and an April 2025 reverse split signal that market confidence and profitability are still in progress.

• Internal control and reporting hiccups remind founders that finance ops maturity is not optional at scale.

• Revenues are macro sensitive. Custody fees ride interest rates and balances. Trading volumes track IPO windows and venture sentiment.

• Competition is crowded, including Carta, Nasdaq Private Market, and bespoke brokers. Take rates face pressure, and differentiation must be product speed, breadth of supply, and better data.

Your Swipe File

• Build data exhaust from day one. Every transaction is a sensor. Package it into indices and reports that market themselves.

• De risk lumpy transactions with recurring layers. Pair a deal engine with subscriptions or custody like revenue.

• Ship platform upgrades, not one off features. Tie launches to outcomes your buyers measure.

• Tighten finance plumbing early. Complex instruments and fast growth amplify reporting risk.

• Cost discipline is strategy. High net revenue margins do not help if operating costs outrun volume growth.