Sohail Prasad and Samvit Ramadurgam are co-founders who met at Y Combinator’s 2012 Summer Batch and then co-founded Forge, which helps accredited investors and institutions buy and sell shares of private companies and recently raised 150 million dollars in new funding in May.
Forge – originally known as Equidate – took off as demand for shares from private companies skyrocketed. The company, launched in 2014, has now raised a total of $ 250 million, including from Deutsche Börse, Temasek, Wells Fargo, BNP Paribas and Munich Re. It acquired rival SharesPost last year for $ 160 million in cash and stocks. According to the company, she now has more than $ 14 billion in assets in custody.
Prasad and Ramadurgam – who helped hire Forge CEO Kelly Rodriques in 2018 – say they’re excited about the success. They still have a stake in the company; they remain members of the board of directors without voting rights.
But after spending 18 months as co-chair of Forge at the start of Rodrigues’ tenure, they left early last year to start tinkering with a new idea, one that Prasad says is all about access. from more people to the shares of private companies. . Called D / XYZ (pronounced “Destiny”), the idea is to allow any investor – not just the 1% – to invest in startups whose services they use and love.
Sadly, the two don’t offer much more of a curtain-raiser than that right now, although Prasad suggests that D / XYZ is neither a new fund nor a crowdfunding vehicle. We don’t sell tokens either, we understand. Instead, Prasad is hinting at an entirely new product, saying the company is being cautious about how much it shares publicly because it wants to “get the green light from regulators first, as well as make sure that we have a clear path to the market “. he says.
In the meantime, the two have raised $ 5 million in seed funding from many founders who like the idea of making it easier for private companies to run for their parents, friends, clients, partners and anyone who loves what. they build. Among the participants in the cycle is Coinbase co-founder Fred Ehrsam; the co-founder and CEO of Plaid, Zach Perret; Charlie Cheever, co-founder of Quora and Expo; the founder and CEO of Superhuman Rahul Vohra; and serial entrepreneur Siqi Chen, who recently founded a financial software company called Runway.
As for some of the fledgling startup’s more obvious competitors, Prasad doesn’t seem concerned. Asked, for example, about Carta, a well-funded company that helps private companies and their employees manage and sell their stocks and options and has long been talking about democratizing access to private company stocks, Prasad said that rather, it remained a direct competitor. at Forge since both are primarily aimed at businesses and not individuals.
And what about PSPCs, the specialist acquisition companies that accelerate the transfer of private companies to the public market, allowing (at least in theory) more people access to high-growth companies at stages earlier? It’s a partial solution, says Prasad. But the way he sees it, “PSPC is more a reflection of people wanting late access to private technology and their best option right now is to donate money to a PSPC official who will hopefully find the way. a promising company to merge with in two years or less. ” He calls them an “abstraction layer”.
Of course, there is also the question of whether Forge will be a friend or an enemy if whatever Prasad and Ramadurgam build is successful. Could their technology be sold back to their first company? Could Forge come to see them as a rival to his company?
“What we are doing now is not competitive,” insists Prasad. “It’s more about picking up where we left off. Forge focuses on trading, custody, enterprise solutions and data. He built what some call boring plumbing. Now that the plumbing has been put in, it has “made it possible to build a lot of other interesting things as well.”
So, does D / XYZ work with Forge to some extent? Prasad hesitates. “Potentially,” he said.
In other words, stay tuned.
In the photo above, from left to right: Sohail Prasad and Samvit Ramadurgam.