All right. Welcome back, everyone, to the 2025 Global Exchange and Trading Conference. I am Patrick Moley. Thanks, guys. Global Exchanges and Trading Companies. Our next guest is Kelly Rodriques, CEO of Forge Global. Forge is a private securities marketplace headquartered in San Francisco, California. They went public a little over three years ago now. Thank you so much for joining us, Kelly. It's a pleasure to be here. All right. Private markets are highly correlated to the IPO market and the broader capital markets. You posted the strongest revenue quarter in a few years in the first quarter. How are you feeling about the current market environment, given all the volatility we've seen? What's your kind of outlook here as we head into the back half of the year? Yeah. So look, we're cautiously optimistic about this year. We came out of 2024, like everybody else, feeling like 2025 would finally be the year when the IPO market opens up. And look, there's probably 40-60 companies that over the last three years have been waiting for that to happen. But we are in a period where every day and every week we see some volatility in terms of the overall macro messaging in the world. So we are watching what that looks like. But I can tell you this: coming here today, I was looking at pipeline and the indicators, and they look strong. So we're pretty excited about the rest of the year. That's good. It seems like it—it sounds like it paused for a little bit and then it opened back up. Do you think that we've reached a point where people feel more comfortable dipping a toe in the water in the private market? I wouldn't say that, but I would say that what we've seen since the Great Reset, we referred to it in 2021, when valuations hit all-time highs, we have seen a consistent move back into the market. I think people are a lot more comfortable with their ability to get in and out now. The early indicators—we typically report on this on a monthly basis—the early indicators about IOI interest are as strong as it's ever been. If we move past the transactional side of the business, you've been doing a lot on the data side. You've announced a number of partnerships. You announced the acquisition of Accuidity Capital Management. Can you speak to just the broader push to kind of move private markets forward and Forge's role longer term in that vision? Forge is in the middle—actually, I'd say the closing innings of a major transformation. We believe three years ago when we started making these investments, and it's been a difficult period of time in the markets overall as a public company to make investments at the scale that we've done it. The three big bets were: let's roll out a highly automated experience that can be global and extensible. We've teased that that's coming soon. The data partnerships that you refer to are all about people looking for a reliable price discovery, a trusted price discovery for what a private share is worth. The ubiquity of Forge's data everywhere is super important to the market. CNBC and Yahoo and ICE all agree. This asset management play that we made with Accuidity, one of the things that we should all recognize is as private market becomes mainstream, just like public markets, people want to get into products that aren't just single-name stocks. They want to get into what effectively are the ETF version of the private market. The Accuidity deal was done specifically to offer a slice of the top 60 names as the first publicly traded fund that operates on an index passive basis. That is just the beginning. We think that is a combination of price discovery, access, and technology standardization. That is the winning long-term bet. Historically, being able to invest in a private company, you've had to be an accredited investor. Like you mentioned, there's these fund structures that are popping up that are going to be able to break down those walls. Can you talk about how the fund is structured to where you can distribute it to retail investors? What are some of the hurdles that still need to be crossed to kind of make that fund structure a reality? Yeah. The first big hurdle is the SEC, and we're in that process now. Just like every other publicly traded fund, there are liquidity requirements. There are requirements that we're able to accurately set ATVs for these shares. I'd say we're finally getting to the point in the market where we can do that. Now, to the extent we get through, and we think we will later this year, non-accredited investors will be able to participate in the private market. That's a big deal. I think wealth platforms all around the world and RIAs all around the world that want to put their clients into the exposure will give them the option to do that. We're also seeing some other fund structures, which we've reported on previously around SPVs. I'd say to the first question, a publicly listed fund that's got that exposure is probably the first step in opening up the access to non-accrediteds. If we think about the data side of the business, I think today it's less than 5% of your revenues come from data. You've announced a number of partnerships here in kind of a flurry to open up the year. It seems like the demand is growing there. How do you see the data portion of your revenues kind of evolving over time? That's a great question. Our belief is that at this stage of the market, data is most important to inform price discovery. The relationship between people going to Yahoo Finance and saying, "What does a share of OpenAI trade at?" and having that be actionable, where you can actually buy it and you can buy it in the range of that price, is really important for the expansion of the platform. In terms of the business model, the users of the data today are mostly asset managers because they're using it for portfolio construction. You're not yet seeing the kind of data consumption and revenue stream that you see in the major exchanges where Nasdaq and ICE are generating billions of dollars of annual revenue. We think that will come. Between now and when that time comes, we think price discovery that moves people to the platform is the most important impact in establishing a leadership position as this market grows. I think one of the biggest or the most striking data points to me when you think about private markets is that the turnover, the trading turnover is, I think, less than 0.25% annually. Public markets is over 100%. How do you think we move from 0.25% to 1% to 2%? What does that mean for the overall ecosystem and kind of Forge's position in that evolving ecosystem? This will tie back in some ways to the asset management part of our strategy. Today, the kind of turnover you're seeing in the private market is almost exclusively driven by the need for secondary liquidity. That's a very reactive kind of market in that if you're a company that's staying private for 15 years, you realize at some point around year seven or eight that your investors might want out or at least partially out. You've got employees that have spent eight or nine years of their career there who may need liquidity. We started out serving that fundamental use case of liquidity for previous investors and for employees. What will make that change is when you see products come to market that are allowing a level of access where that capital is going onto the balance sheet of companies, where Forge is used or a Forge fund is used to fund the balance sheet and the next five years of a private company's investment in changing the world. When that happens, you'll start to see the turnover get higher because the dollar amounts that will then flow through onto those balance sheets. Look, SpaceX already does this today. They are what the future will look like. They're bringing in several billion dollars a year privately that's going on their balance sheet and to provide liquidity. They've got a market cap of about $300 billion. In the private market, if you look at the top 200 names, those are the names that trade. You're talking about a valuation range of $5 billion-$300 billion. The market's still pretty top-heavy. The key answer is balance sheet capital. I think it's obviously a market, or the private markets is getting a lot more attention. You were the first to market and kind of the first pure-play private markets company out there that was investable. Nasdaq announced a partnership yesterday with Nasdaq Private Markets. What do you think gives Forge the right to win here? Maybe you could just speak to the competitive landscape today and how you expect it to kind of evolve. Yeah. Let me be really clear. Forge, while we were first and largest, we do not take that for granted as a right to be the winner. We made some incredibly, I would say, bold decisions to invest in the creation of this next-generation platform. The cash burn over the last three years as a public company has been difficult as a CEO to withstand the kind of scrutiny that goes with it. Our belief is the investment in a globally extensible, highly automated platform and our investment in data and now asset management puts us in a position to win. We still need to execute because the TAM in this market is enormous once it starts to actually take hold. When I see competitors out there following our playbook, it does not surprise me. I view it as, in some ways, a compliment that people see it and get it. I'd say Nasdaq Private Markets has been around for a long time. Clearly, their partnership with Nasdaq is going to give them the benefit of being able to say, "Okay, we're going to break a press release on data because Forge has been in the press like crazy in terms of all these data contracts." We see that emerging. I think you're going to see the winners have a pretty strong data play. We got to continue to execute. Our intention is to be a profitable public company soon and to take the investment that we've made and now start to harvest it. I think distribution is going to be a big factor in your growth, going to brokerages possibly. You mentioned the RIA channel and wealth managers. How do you feel about your distribution channel today? What more can you be doing or do you expect to do over the next several years to kind of help with distribution once you close the equity exit? Yes. Yes. Thank you. This has been the message that I tried to get out in the last couple of earnings calls. One of the things that those of you who follow software and software that is meant to be distributed through extensible API distribution will understand that for Forge to get really big, we have to be able to not only build out a global application for those who want to trade and invest their portfolios, but the technology has got to be extensible inside brokerages, inside wealth complexes, and integrated into other apps. In order for us to do that, the level of investment to make it extensible and secure so that it could live inside of a wealth complex and an asset manager or a wealth advisor can put 1,000 of their clients with data into a set of investments required a level of technical investment that made us a reliable partner for large institutions. Distribution so far has been almost exclusively, you come to Forge, you go to forge.com, you open an account, and we do business with about 6,000 institutions. About half of our business is through institutions who are buying on behalf of a client or on behalf of their portfolio. What you're going to see next is Forge integrated more closely into the experiences of mainstream investing. You're going to see private market exposure through your wealth advisor and integrated into other investment platforms. That will change the game. The same is true with asset management. When these funds come out, we'll be announcing who's distributing some of these funds. I think you'll all recognize the names because the companies that have been out in the press in the last six months, whether it be Vanguard, BlackRock, anybody, the largest players have said, "We're moving into this private market space." To do that at scale, they're going to need a Forge and all of the data and platform investment to pull it off at scale. One of the companies that's talked a lot about it has been Robinhood. Vlad has written op-eds and talked about it on his earnings calls about wanting to democratize access to the private markets. Tokenization is a big thing that he likes to talk about when it comes to private markets. What do you think about tokenization in private markets? Is it necessary? How do you kind of see that pushing the market forward? Yeah. We've been following Robinhood and Vlad's message for a while. We've been following this opportunity for about a decade. I've got a couple of people on my board who I would consider crypto-native pioneers, including Asiff Hirji, who was the President and COO of Coinbase. My view of it simply is this: tokenization essentially allows for you to fractionalize and thus make more accessible any asset class, whether that's a fixed-income asset class or a private share. Our view is not if, it's when. Today, we believe that we probably won't reach a native crypto investor that's incremental to the current TAM by moving to tokenize right now. We think it's coming. I'd say my view is that launching this 1940 Act fund to non-accrediteds is one version of this democratization that Vlad's talking about. The next version is going to be to tokenize it. When that happens, we'll be there. We believe you need to have a network of investors, and you need to have access to a broad piece of the market to make it valuable. The question is, does tokenization serve the interest of the issuer and the company themselves? To the extent that it offers friction reduction, again, into capital coming onto their balance sheet, I'd say it would be broadly adopted by the market. If you're tokenizing just to sell secondary shares, I would say at this point in the market, there isn't enough benefit for us to do it yet. We're looking at it. I think Vlad's audience at Robinhood is 25 million investors that are pretty broad-based retail investors. They're going to either get it through that means or they're going to get it through a 1940 Act fund. We think ultimately it'll be both. We look to participate in that market at the right time. On the regulatory side of things, we talked a little bit about the SEC. There's another regulatory story emerging with more relaxed regulation. We have the Texas Stock Exchange here. Texas is doing a lot of things to try to appeal to corporates and make it more attractive to go public, just given some of the costs that are placed on companies that are trying to go public, which I think has led to a lot of companies staying private for longer. That's obviously baked into your TAM and your expectations. How do you expect more relaxed regulation going forward to kind of affect that trend we've seen where corporates or privates are staying private for longer? Yeah. We're on Capitol Hill every quarter talking to policymakers. I understand that part of what has happened is the regulatory requirements and the scrutiny and some of the short-term mindset of being public has caused broadly companies to pull back and wait and not go public until they're ready to withstand the scrutiny of it. I don't think that's going to change. I do believe that there are attempts to reduce some of the burden. I believe that on platforms like Forge, and we won't be the only one, if a company is able to raise primary capital to continue to fund the business and have an opportunity to also provide liquidity, the concept of being listed on Forge is a really interesting alternative. For it to be a viable alternative, it's got to allow companies to control and manage how balance sheet capital is priced and how secondary and liquidity in general is controlled. I do think, depending on whatever the policymakers who are in power are, they will uniformly say it's better if companies go public at some point in time. I think they've got to find some rational answer to making it easier. I think there's a lot of conversation going on right now on Capitol Hill to do that. We like that because we think democratization broadly is a good thing for the market. I don't think we're going to see companies start to go public again at year five or seven of their existence. There's just too much capital available to them that's not required. I think that trend's not going to go away. Shifting to the operational side of the business, you've set a goal to become Adjusted EBITDA profitable by 2026. What are the steps that you're taking right now to achieve that? How should we think about your cash burn targets going forward? Yeah. I got three answers. I have a brand new CFO, James Nevin, who's here in the audience. He came in and really is sort of part of the next generation of Forge, Forge 2.0. He understood the mandate coming in that we had made some big investments in 2021, 2022, 2023, and 2024. We are carrying a very significant engineering enterprise to pull this off. We had designed with it in mind that we would be profitable and break- even on an Adjusted EBITDA basis in 2026. This is part of his remit and my mandate. I think everyone in this audience that's listening should know that we understand that you also want to see a decreasing burn as we move towards that. You will see that. We have a belief that based on where the market currently is in scale, that we'll get there. We would just like everyone's trust. We understand trust, but verify. We're absolutely committed to it. The context for how we will invest is based on getting profitable in 2026. Make no mistake, that is an absolute priority for me and for the leadership team and for the board. We recognize we got public when we could raise a bunch of money. The market sort of said, "Hey, show us that you can get profitable." We said, "We will." Stay tuned. All right. So we'll end on a big picture question. We talked a lot about just the evolution here. If we look ahead 10 years, is there any quantifiable predictions that you can make around the size of the private markets and Forge's position in the ecosystem? Yeah. So I think we have a pretty clear view now that what the private market needs to get really big is an automated platform that's accessible from any place in the world to make this a globally accessible market with counterparties that can trade. I believe that in 10 years, you will see the emergence and probably two or three players in the world that provide that kind of access on a scaled global basis. I think you're going to see tickers and data become ubiquitous. You're seeing the emergence of that now. Just like you see a ticker across the bottom of CNBC, you're going to see a ticker, and this is part of what the Yahoo and CNBC deals were for Forge, that show what pricing looks like. Price discovery will be evolved. I think you're going to have a whole bunch of options. You can either buy single-name stocks. Look, everyone's watching the public Mag 7, and people are going to want to invest in the private Mag 7. They're also going to want to invest in passive products that provide exposure. You're going to see a market that's much more mature and based on technological infrastructure that allows it to be a truly global market and cut across geographic boundaries. It is our view that it is our job to provide that ecosystem as an enabling technology provider. We don't think it's 10 years away. I think you really see big impact on this in about five. Yeah. All right. It seems like a part of the market that's really underappreciated. Kelly, thanks so much for joining us. This has been great. Thank you, Patrick. Thanks for having me. Thank you guys.