EquityZen Users Community/Investor Experience/Brokerage Platforms
EquityZen vs ForgeGlobal (ex Sharespost)
Today, I will analyze the similarities and differences among brokerage platforms from which anyone can invest in a pre-IPO company; namely, EquityZen and ForgeGlobal.
History of platforms
EquityZen
A brief EquityZen review shows that the company was founded in 2013 by Atish Davda, Sriram Bhashyam and Phil Haslett. EquityZen has two main offices: in New York and Atlanta. In terms of investor activity, EquityZen has more than 260,000 shareholders and investors worldwide and, to date, more than 29,000 investments have been closed on the platform.
ForgeGlobal
ForgeGlobal was founded in 2012 by Samvit Ramadurgam, Sohail Prasad, Andrea (Lamari) Walne and Gil Silberman. The company headquarters is located in San Francisco, California. ForgeGlobal has more than 300 thousand investors worldwide, and each investor can find more than 400 thousand companies to invest in. Also in 2020, ForgeGlobal acquired SharesPost for $160M (SharesPost was a company that provided liquidity solutions to the private growth asset market).
So, I don’t compare construction “EquityZen vs Sharespost vs Forge”, I just do it for “Equityzen vs Sharespost (Forge)”.
EquityZen vs Forge: Common features of two platforms
- After registration, each investor receives their own personal manager who accompanies transactions and is responsible for answering questions. In case of ForgeGlobal, to contact their manager, an investor needs to press button “contact your specialist”
- The presence of a watchlist and waitlist which allow investors to be the first to know about the specificity of listing companies and provide the opportunity to book an allocation first
- Commission presence: for ForgeGlobal, it is 5% per deal; for EquityZen, from 3 to 5% (depending on the terms of the transaction and the number of investments)
- Soft commit option — an action in which the investor can book an allocation without payment
- There are penalties for refusing a hard commit (an action in which the investor already confirmed his future payment for the deal). For EquityZen, the penalty is $500 after each hard commit is abandoned. ForgeGlobal does not oblige an investor with monetary penalties; however, in case of constant denials from paying, an investor’s account may be blocked forever
- There is a minimum investment amount in both platforms: for EquityZen, $10,000 on first purchase; for ForgeGlobal, $100,000
- It is possible to buy and sell shares from one account
- There is the possibility of portfolio diversification;
- The lock-up period for both platforms is a minimum of 180 days from the date of purchasing the shares
Platform differences. What is EquityZen and what is ForgeGlobal in detail?
1. Investment Process
EquityZen
- Click the “Invest” button next to the deal
- Enter the required information about yourself
- Sign documents required by the platform
- Pay for the transaction according to the details EquityZen gives you
- Announce to your manager that the transaction was sent
- When the transfer is received , the deal will appear in the closed deals section
ForgeGlobal
- Express interest to the certain deal, indicating the amount of investment you are ready to pay for
- Sign the documents that are required by ForgeGlobal (whoever signed all the documents first is more prone to get the allocation)
- Agree to processing of personal data
- Transfer money to specified bank account
- Close the deal
2. Deals and listed companies on platforms
EquityZen
EquityZen offers three investment options:
— individual private company shares (single-company funds),
— portfolio investment (multi-company funds),
— direct purchase of shares.
Offerings occur twice a week on Tuesday and Thursday at 12:00 pm ET. EquityZen reviews each company with some significant facts.
ForgeGlobal
On ForgeGlobal, you can find completely different companies that are at the pre-IPO stage; however, the platform does not have a specific schedule for opening new deals, and there is no system of regular mailings to users. However, it is possible to request that the manager email monthly updates about the deals.
3. Pros of EquityZen (Forge or Sharespost vs EquityZen)
- For the first two times, the minimal amount of investments is equal to $10,000.
- The investment is structured as the purchase of shares through LLC that owns the particular shares in which you are investing in. The advantage is that shares can be easily bought and sold in future within this LLC.
- It is possible to resell purchased shares in the express deals section that the platform suggests.
- Clear, stable schedule of deals that comes out twice a week: Tuesday and Thursday at 12 pm ET.
Are Forge and EquityZen competitors? Of course, yes! So, my investor’s choice is absolutely in favor of EquityZen.
You can join the discussion of EquityZen deals, Pre-IPO and secondary market in the closed Discord group:
Not saying goodbye :)
Successful investment!
