Forge - Investment Outlook, 3Q 2023

The Forge Investment Outlook Q3 2023 report provides valuable insights into the current state of the private market and the trends shaping it for the future. Private companies raised significant amounts of funding during the low-rates cycle, but fundraising has declined by 77% in terms of dollar volume and 68% in deal count from its 2021 highs. Companies are also waiting much longer to raise money than in previous quarters. Mutual fund marks and secondary market trade performance both show a handful of companies outperforming the broader market, with companies in the top decile of mutual fund marks remaining priced at a 22% premium to last funding round. Primary fundraising is registering at 15% of peak volume from prior years, and the length of time between fundraising reached a 5-year high in Q2 of 2023. Exits are down more than 80% since the end of 2021, and M&A activity has been steady at around 5 deals per quarter since Q1 ‘22 with a few SPACs illuminating the extremely dry exit environment. The lone IPO of Cava in Q2 provides a glimmer of hope for a re-opening IPO window. The report also provides information about the marketplace infrastructure and technology solutions offered by Forge, which aim to provide investors with knowledge and tools to gain better access and transparency into the private market through proprietary insights derived from their marketplace and data offerings. The Forge Private Market Index is also introduced, which tracks the performance of a diversified portfolio of late-stage private companies. Overall, the report provides a new perspective on trends and performance within the current and historical market cycles, and is intended to provide institutional and professional investors with insights into the private market.