Transcript:
slava (00:02.725)
Hello and welcome to another episode of Smart Humans. Super excited for today's guests. Many of you talk about trying to get into these amazing companies before they go public and we have one of the leaders of the space. Welcome Kelly Rodriques, CEO of Forge Global. Thank you for joining.
kelly rodriques (00:20.11)
Thank you, Slava. It's great to be here.
slava (00:22.597)
Super excited for this. I'm a big fan of pre -IPO companies, so great to be able to talk to one of the leaders. Let's just get started from the beginning. How did you even get involved with Forge? Or more importantly, how did you even get into Alts?
kelly rodriques (00:38.702)
Yeah. Well, like a lot of people that are probably listening, um, I started out as a founder myself, um, and took my first company through the public listing process back in the early two thousands. And after doing a couple of those, um, I joined a large venture capital firm and started to see what was going on in terms of.
venture investing and private market investing. I also recognized and experienced the liquidity issue myself being in a company for eight or nine years. And so at one point I became the CEO of an alternative asset custodian. I actually left the venture firm and became the CEO of a company that held alternative assets as a service. And that's part of the Forge model today. It was while I was there.
that I figured out, wow, the market needs infrastructure for it to trade, for people to have access to this investment class and all the problems that we're trying to solve. Now that was about in 2015.
slava (01:43.525)
Nice. So can you just tell us a little bit more of that background? So you took a company public, you're saying?
kelly rodriques (01:48.622)
Yeah, in 2000, I was on my roadshow actually when the market collapsed. We saw a similar sort of closing of the IPO window during the end of the dot com era. I'm dating myself a little bit, but in that time I was on my roadshow actually. And one of my largest public strategic investors bought my company out of registration, which is a somewhat unusual thing to happen.
but I was in the process of doing the listing on NASDAQ and we got acquired. So that was sort of, you know, uh, 20 years ago and flash forward. Um, I've run three or four private companies since then, including my four year stint as a venture capital guy.
slava (02:35.589)
Super interesting. If you can recall, do you remember what the market cap or the high level expectation of what the valuation was gonna be for your 2000 IPO?
kelly rodriques (02:45.326)
Yes, we were about $500 million valuation company according to our listing price. And similar to what you saw in 2021, there was a collapse of valuations. Now, back in those days, a lot of companies did not have material revenue streams. They were going public at pretty big prices with very little revenue. We had close to a hundred million of revenue. So it was considered a more, I guess,
legitimate or sound IPO, but the entire market just collapsed and price discovery, or I should say valuations dropped precipitously. And so we were sold and acquired by a public company, but you saw a similar thing happen in 2021. We can talk about that later.
slava (03:32.613)
You know, it's fascinating because, you know, a company would really struggle today to go public at a $500 million valuation. So you have like incredible perspective on that. What was that like back in the day? And, you know, yeah, what was that like back in the day?
kelly rodriques (03:49.486)
Well, I'll just say this. The concept of the unicorn didn't exist then. Companies were going public on average at a value of about four or 500 million, and they were going public in about their fifth or sixth year of life. We were at the time an eight -year -old company. So we were considered kind of an older company to go with revenues of about 90 million. And so, you know, as I looked at what's happened since then, now a $500 million valuation company would not go public.
And so, you know, you've now got the timeline extending private companies going into the public markets today are somewhere between 12 and 15 years old. So you've got a real shift from back in the early 2000s.
slava (04:33.797)
Do you have any sense for what like the average IPO price is like in terms of market cap these days compared to your 500 million? I'm gonna guess, you know better than me, but I'm gonna guess like, I don't know, five billion?
kelly rodriques (04:46.99)
That's really good. That's very close. It's about 4 billion. And there's obviously some massive names out there that go out like Snowflake and some others that are in the 80 over 100 billion range, but the average is about 4 billion. That's when we looked at it back in 2021. Now the SPACs brought that down because of the big SPAC phenomenon that happened in 2020 and part of 21. That average came down from somewhere around 6 billion.
slava (05:16.614)
I mean, we'll get into this, but here's obviously the opportunity for Forge Global, right? Which is, it used to be that a company was already public by the time it's 500 million. Now they're waiting for 4 billion. Who's getting all that upside between the early days all the way to that 4 billion, right?
kelly rodriques (05:34.382)
You're nailing it. You're totally nailing it. Now, if you think about it, it's no wonder that people want to invest in pre IPO companies. And not only that, there's somewhere around, you know, 800 or 900 unicorns in the world. If you think about companies that are 500 million, they're pretty mature. And the truth is there's probably 2000 of those. If you think about 500 million and above. And so if you want to get that same kind of return that you used to get,
in an IPO back in the early 2000s, you almost have to come into the pre -IPO space. So that's something we're seeing and that's part of the impetus for the founding of Forge.
slava (06:09.253)
Nice.
slava (06:14.757)
Excellent. So we'll dive into Forge in just a second. I just want to learn a little more about you and how you like to invest. So obviously you must know a thing or two about venture. You were a VC, you started your own companies. Now you run, you know, a whole marketplace around this pre IPO companies outside of that space, which obviously you're exposed to. What else do you like to invest into or where do you like to put your money? So if I was going to simplify it down to, you know, obviously there's venture, there's crypto, there's private credit.
real estate, art, collectibles, et cetera. How do you think about those categories?
kelly rodriques (06:49.998)
So one of the things that I think about is what sort of asset allocation is right for me. I'm not an expert investor in the public markets. I probably know less about it than most of the people watching this. So I have a couple of advisors that handle all of my public investing and liquid market investing. And one is a little bit higher risk and one is a little bit lower risk.
But I am very active, in fact, have been a customer of private market platforms myself before I became the CEO here. So most people today think of an alternative asset allocation and the 25 to 30 % as being pretty down the middle of the fairway. I'm probably a 50 % allocated into alts. And so I'm a big believer in obviously.
you know, the product that we represent here. So I'm a buyer of individual names. I'm also a real estate investor. So I'm all in on alts. I have played with crypto, but my view of crypto is you're either going to come in and ride the next up market when it gets down as it has to 6 ,000 or 10 ,000 in the last cycle, or you're going to buy it for the long haul.
Uh, and you're probably going to have to withstand some, uh, some devastating drops at times, but I'm, uh, I'm probably a 50 % alternative asset, uh, investor myself and I'm all self -directed. So I don't, uh, do that on an advised basis.
slava (08:32.453)
Amazing. You're the perfect person to have on the podcast. So the 50 % that's in alts is that over 50 % in venture and then sub 50 % on the other stuff, real estate, crypto, et cetera.
kelly rodriques (08:42.542)
Yeah, yeah, the vast majority of what I'm doing is I'm buying private company names myself.
slava (08:48.837)
Can I ask you which ones you like to invest into or is that the sort of thing you don't want to cover?
kelly rodriques (08:54.83)
Here's what I tell you. I'm very bullish like everybody else in the world on AI. And I'm watching the top five or six sort of large language model players, you know, in that space. I am still very interested in enterprise software and any subscription based model players. I don't disclose the exact words, I won't disclose a
the specific names, but I do, I do invest across the private market sector. And I like high gross margin businesses, uh, like software, uh, and software enabled services.
slava (09:37.029)
So in the public markets, there's an ETF called the Renaissance ETF, which is like an IPO ETF. It's probably like, let's call it easier for some of our listeners to just buy that. Why should they buy that or not buy that and like go with what it sounds like what you're doing, which is just getting ahead of that in an earlier stage, maybe more risk, maybe a little bit more difficult to execute, et cetera. What are your thoughts on that?
kelly rodriques (10:04.75)
My thoughts on that, and we've looked at that and I'll just interject here that we have put out the first investible pre IPO index and it's up and running now for qualified investors. But I, when we've looked at the other publicly available options, we track that index ourselves in our data product. And I think it's a fine product if people want exposure.
I don't think it represents in the underlying data, the actual exposure to private companies, particularly at the price that we believe is relevant and should be tracked. So I think it's a fine investment as a correlation to pre IPO, but it's not pre IPO in terms of the underlying pricing data. So, you know, again, I'm a fan of it and I, and I,
You know, I'm in a few of the products that Renaissance is in now as a public investor, so I'm a big fan of that operation.
slava (11:11.429)
Great. And so that's a good segue as to what do you think of the current market? And that's a very big question with very few words, but I'm just going to let you just take it wherever you'd like. Just recently read it, IPO'd, but you could take it way beyond venture if you'd like. Just tell me what you think about the economy, the market, where your head's at.
kelly rodriques (11:35.758)
Yeah, look, I think we're going to soon start to see normalized interest rate, hopefully. I think my headline news here is part of what's happened in the last 10 years has been the results of the zero interest rate environment. That's driven valuations in the private market to insane levels because the cost of capital is so low that people were pretty price resistant to.
to private valuations. Now with the flipping of that policy, you saw disruption. We call it the great reset in private valuations. And the great reset is now entering its third year. I think it'll likely complete as interest rates come back down towards the end of 2024. All that having been said, the public market started recovering in late 22 and early 23. But if you take a look at
the markets more broadly, valuations are starting to get high again in the public markets. Now, I believe that as you see more IPOs come into the public market, and I think the Reddit and Astera IPOs are great indicators. When you've got a healthy IPO market, in my view,
That's the time that you're going to see a combination of reasonable pricing as long as interest rates aren't artificially low or crazy high. So my view is we're exiting a period of fear because valuations dropped, interest rates skyrocketed, and the markets have been down to now into an expansive opportunity with the S &P being at 20%.
Last year, I should note that at the same time the S &P was up 20, that the Forge Private Market Index was down 20. And it's now up for the first time 4 % year to date. So I think right now is a really interesting moment to go back into both the public and the private markets. So I'm pretty bullish at this moment.
slava (13:42.757)
Let's try.
slava (13:46.501)
So do you think we're like at the bottom of the S curve?
kelly rodriques (13:49.582)
I think we're coming out of the bottom on the private markets. I think we hit that in Q1 of 2023. And so we've seen a continual incremental volume improvement for the first, for the last three quarters of 23 and Q1 is more of the same. So I think, I think we've, we're, we're coming out from the bottom. It's not going to be.
you know, a J curve anytime soon, but I think you're seeing incremental improvement there. I think we still need to see what happens with interest rates. I think people are a little jittery about what's been said recently about the possibility of a sustained high rate environment. If we reduce that much further, then we'll probably see a little bit of a stall at delay.
slava (14:35.589)
Yeah, so as we record, there's still a lot of money on the sidelines. People have mentioned that maybe the interest rate cuts are going to be slower or not as many as was expected. The public markets are having a reaction to that as we record. It is an election year. So maybe we're having our pre -election recession. But are you saying that, you know, don't overthink the day to day, like we're in a bull market and money should be going back to work?
kelly rodriques (15:05.998)
Yeah, I guess what I'm saying is, well, this recovery could be choppy. And I think it is choppy. I'm seeing it in my data. But I'm also seeing institutional investors come back into the private market. So what I think is, even though there's going to be some choppiness, we're still resetting valuations privately. The public markets will face whatever macro adjustments that we're going to have hit in 24.
I'd say it's still a time to get back in and just be prepared to ride out some choppiness.
slava (15:38.213)
Amazing. So not everybody who listens is an active trader in the private markets. So they might not all be familiar with the scale and how established Forge Global is. Can you just give some color as to how big, how many names, where you guys are doing, how many players you work with, and just give some background for folks to understand?
kelly rodriques (16:03.022)
Yeah. So, um, Forge has been public for about two years. The business is a combination of really two things. It's a marketplace that's got custody, meaning we actually hold some securities as well. We've got about 2 million investors holding custody assets today. Uh, the marketplace during good market times is trades between one and 2 billion a year.
and during difficult market times, a little under a billion. We also have a data business and that data business is a subscription business which allows people to subscribe and look at price discovery, look at last trade, look at an anonymized trading volume and IOIs. Really, we think part of the problem we're solving there is for price discovery, which is a really tricky thing in the private markets, particularly during difficult times.
And so we trade, we've probably traded somewhere between 550 and 600 names in the last 12 months, just under a couple hundred unique names have traded. We've got investors in 89 countries. And so Forge is, we think the leading and certainly the most at scale player in the game today. But it's still pretty early days.
So we see a 10 year time horizon that it will take to see the standardization of technology, which we're investing heavily in now to get the market to more mature state.
slava (17:44.837)
Did you say in the last 12 months it was the 100 to 200 names or is the 500 to 600? I wasn't sure.
kelly rodriques (17:49.55)
The last 12 months, it's a little under 200 names.
slava (17:53.765)
Gotcha. So just for perspective for people. So maybe you want to invest into Microsoft. Maybe you want to invest into Nvidia, which everybody's talking about. You just go into your Robinhood app or you go into Charles Schwab or whatever, and you just buy it in the public markets. Some of you have heard about open AI, which is super trendy. Maybe it's Stripe or SpaceX with Elon Musk. None of those are in the public markets yet. And if you want to buy them, you have to find them privately, which is exactly where Forge Global comes to play. Right. And
Those names will be maybe part of those 100 to 200 names in the last year.
kelly rodriques (18:26.158)
That's right. So the most coveted names in the world, if they're trading, they're likely trading on Forge. You'd go in, you'd open an account. Now today to be an investor in any of these names, you have to be an accredited investor to buy individual names. So you'd go in and do the KYC and all that to get onboarded. And then you're able to look at and submit IOIs on a broad range of names, including.
slava (18:54.021)
What's your, sorry about that, what's your perspective on that? The fact that, I mean, obviously you're just following regulation, which is they have to be accredited, but what's your perspective on trying to allow, let's call it unaccredited or the limitation of being accredited to get access to potentially these higher upside opportunities, which is, in my opinion, a little unfair.
kelly rodriques (19:12.622)
Yeah, you know, I'll just, I'll just tell you right now, part of my whole reason for doing this was I felt like there's so many great investment opportunities for investors to have so much, you know, us wealth is created by, you know, private companies getting big and becoming the next, you know, Amazon or, or space X. And I feel like access is a huge deal.
Now, U .S. regulators are also interested in safety and protection of risk and all that. So I think that there is a way to have this asset class open up. I think one of the biggest questions is how capable is an everyday investor in picking a single stock? Today, you've got ETFs and index funds in the public markets, and a lot of people would rather invest that way.
So in the private markets, one of the things I've seen is many of the people that buy on Forge are actually employees of some of these companies. So if you're an AI employee and you sold some of your stock, you might turn around and say, I know more about the AI sector than any financial advisor that could advise me to invest in an individual name. And so I think that there is some...
value and there's some truth to the fact that individual unaccredited investors that have enough experience should have access to the space. I think regulators are going to continue to watch the space. And then one of the reasons why, and this is the big announcement we just made yesterday, the investible index, the 75 names that make up the index, will eventually make their way to a retail 40 act opportunity so that people can buy a basket of 60 private
companies that are doing well, highly liquid and have some level of diversification. So I think my simple answer to the question is we believe more investors should have access. We believe you need to have some expertise to know what name to buy and have some data. We can provide the data. We're not advisors. So we're not going to tell you that Stripe's a good deal or Andoril's a good deal. We're just going to make it available.
kelly rodriques (21:33.262)
And then I think everything else comes down to whether or not there's an investable index that allows you to spread your risk around. And that's part of our mandate as Forge to make that index translated into products that more people can get into. And funny thing is, I'll say this, when we went public, one of the people asked me on the road show, Hey, why are you guys going public? You're only, you know, 10 years old. We're a relatively young private or a public company. And I said, part of the reason we went public was because we felt that.
slava (21:47.141)
So.
kelly rodriques (22:02.094)
Forge as a stock was an interesting proxy for the entire private market because we're tracking it and we provide access to it. So I'd say, yeah.
slava (22:12.517)
If you think about it, what Coinbase is to crypto in terms of beta, you should be for private markets, right?
kelly rodriques (22:19.918)
Well, that's part of how we thought about it when we made the decision to go. We felt like there needed to be infrastructure and our commitment to building private market infrastructure would cover the success of the entire market.
slava (22:34.117)
That's awesome. Um, I just want to echo back what you said, just cause you said it pretty fast, which is you have this investible index, which is basically like this 60 to 75 companies that you put all together. So it's basically, uh, you know, a mix of the best companies to show how that market is going kind of like the SMP is, um, you know, to, to the public markets, but then you're creating that. I hear this correct, a 40 act fund, which means you're creating an actual product that people can invest into.
that will sit on top of leveraging this index.
kelly rodriques (23:06.062)
So here's the specifics. As of yesterday, if you are a qualified investor, you can invest in a fund called the Acquity Mega Unicorn Fund, which is powered by the Forge Index. Now, that is a fund for pretty wealthy investors. My vision, our view is that that will go down market to an accredited fund and ultimately to a 40 act. We're not there yet.
because there's got to be enough inventory to facilitate the level of interest that would be in that fund because a lot of people would be interested in that. So the market will evolve into it. I'd say in a couple of years, a 40 act index fund powered by the forged private market index will be available. I know that the investor partners, equity that we partnered with, which are former fidelity guys are really good and really interested in this.
And so over the course of time, the liquidity fund will start moving down into what will ultimately be a 40 act fund. And look, the private shares fund is available today. Yeah.
slava (24:15.909)
So just to translate for some people, so right now, the qualified means that you have to have over $5 million in net worth. So that's what's available today, which is amazing. You're then going to try to bring it down to the accredited folks, which is over $200 ,000 of let's call it salaries or million dollars in net worth, et cetera, et cetera. And then you're going to try to bring it down to retail, which is anybody can invest at it no matter what, as if it's almost like a public stock.
kelly rodriques (24:41.774)
100%. Yes.
slava (24:43.717)
Amazing. So I love that vision. I love the democratization of access there. So you mentioned, I want to dig into this AI. You mentioned you have been investing personally into, let's call it, you said the top six LLMs, et cetera. AI all of a sudden created a lot of excitement into investing in the private markets and the venture world. All of a sudden there's like crazy rounds and you hear like,
Amazon investing like 2 .75 billion into entropic or whatever like this crazy stuff. So how has AI generically, how has it impacted your business? How has it impacted private markets? What's your take on all that? How has AI impacted for simplicity sake, the world of investing?
kelly rodriques (25:30.542)
Well, just like any other trend that came before it, there are sectors that emerge that capture the interest of venture capitalists for a decade. You know, the internet boom of the late nineties, early two thousands fueled investing for 10 years. Now that was during a period where there wasn't such a thing as a secondary market. The sort of big
segment or sector of the decade is AI. And the potential of it, the scale of its impact is so enormous that even venture capitalists are struggling to get into companies. You mentioned Amazon and Microsoft as another example, are making huge investments because they see the infrastructure.
opportunity around infrastructure tech to build and run large scale AI models. So we think that this has drawn a lot of people back into the market, trying to get into some of these names. They're hard to get into. And it's also been a part of the thawing of the market. So if you think about AI being sort of the sector of the moment,
And the IPO market starting to open up with Reddit and Nesterra, a few more being considered and thrown around. I think that will really bring institutions back into the private market. And we're already seeing it now. So I think AI is driving a lot of the enthusiasm, but we're trading a lot more than AI now.
slava (27:18.469)
Nice. And you mentioned that we might be seeing more IPOs soon. You obviously don't have the answer, but you are as knowledgeable as anybody would be about this answer. Do you feel like the floodgates are about to open or are we still slowly opening up and we're waiting till 2025? Is it going to be one of those things where in 2021 where you couldn't keep track of all the IPOs and the SPACs because there are so many every day? Or...
What are you thinking in terms of the horizon for the next, let's call it, six to, between now and the end of 25?
kelly rodriques (27:54.126)
Yeah. So I don't think we're going to see a replay of 21 anytime soon. The combination of the SPAC craze and just the number and valuation of IPOs was, was just unsustainable. We could see it during the year, during, during end of Q2 of 21, we were going, Oh man, this is, this is not going to hold. Um, but I think everyone's watching the performance of Astera and Reddit.
there's a lot of companies that wanted to go public in 2022 that didn't. And I'd say if you continue to see broad support for the stock price of those two, you're going to see increased announcements of IPOs for 2024. I think 2024, the back half of it will start to see an increase of IPOs. I don't believe it's going to be, you know, a
run for the gates, we're all going to come out. I think you're going to see names that were waiting for market recovery who are pretty mature businesses that are doing well, have good fundamentals. They're going to start coming. And I think people are watching Q2 to see if the stock prices hold on Reddit and Nastera. But my individual view, this is not the view of Forge officially. My personal view is that you're going to see more IPOs in the second half of 24 and 25 will likely be.
a more healthy, normalized IPO year.
slava (29:21.861)
So something that people might be thinking about, as you just mentioned, there's gonna be more of these IPOs in the second half of 24. So I, as a listener, have a choice. I can try to go buy that company today through Forge at X price, or I go wait for the IPO and then buy it at the IPO or a couple days later or whatever at Y price. So how would you respond to that listener thinking about that trade -off and the pros and cons of that?
kelly rodriques (29:51.054)
Well, I'd first say that the most highly traded names on Forge are companies that have announced they're going public. And so both Astera and Reddit were in the Forge private market index as private companies. And they obviously come off the second that they go public. So I'd say that as companies announce, we will see a movement.
starting with institutions that will come in and want to buy within six months of the company's planned IPO. I'd say the individual investor, to the extent that they're qualified and accredited, I mean, not qualified, accredited, needs to determine whether or not they're going to wait until the company is actually public to get in. But what we've seen in the numbers, and I'll go back to the previous period,
that in the six months previous to an IPO, a lot of trading activity takes place and pricing starts to rise pretty dramatically. The closer you get to the IPO and some of the biggest IPOs at 21 traded privately on Forge at very high volume before they went out, including Palantir, the guys at, oh,
Gosh, I can't remember now. It's escaping me. But Palantir is the name that comes to mind. So some of these volumes will go up. So I'd say if people hear about an IPO announcement and then come to buy it, they should expect that pricing will start to rise on that news in the private market. That's one of the reasons why there's a lot of speculation across some of the companies that are rumored to go. And we'll continue to watch it. But...
Um,
slava (31:48.325)
Who are those rumors? Since you're the one with the best rumors.
kelly rodriques (31:52.398)
Yeah, you know, I don't have that on my, on my briefing. I think what, what I would say is that, you know, right now, if you look at the investible index chime and Epic games and scale AI and Anderil and SpaceX are all in the index now. Um, and these are, uh, these are companies with, um, with varying prospects. I don't think SpaceX has really ever been a, uh, a company that's been rumored to go public. I don't think. Elon particularly likes, uh,
the public markets until the business is way, way, way at scale. I think if he could have kept Tesla private for another five or seven years, he probably would have done it in that timeframe. 2012, that opportunity wasn't there. But we could talk about that further maybe on the next one.
slava (32:43.077)
Nice, so last thought for the average investors. So how would you advise them to be thinking about working with your company and your product? They obviously have to think about where they're allocating their money, what they're doing. This is not investment advice, but rarely do they have the CEO of the company getting to talk to them. So how would you tell them to think about potentially getting exposure and how to navigate it?
kelly rodriques (33:06.574)
Well, the first thing you got to do is you've got to sign up and get alerts and put yourself on a list to be notified of what companies are trading. Because what's happening at Forge is that every month there's a new set of companies that do their first trades. And some of these are in pretty exciting sectors. And so whenever a new company comes on or there's news,
Or in some cases there are company sponsored offerings. So we do this for companies who are actually promoting either secondary trading or some form of access to their stock. Then by signing up to get a notification, notifications, you're going to have that access. Then it's up to you to figure out whether you like that name and whether you want to do more work. But if you don't know, then you're sitting around and there's a lot of word of mouth in the space.
And so people will say, Hey, I just bought, you know, XYZ company on four and check it out. And so there's a lot of that going on because we have a pretty expansive list of people that have signed up, um, and, and are looking, so you need to get on board.
slava (34:21.381)
Amazing. Thank you for all that color. So switching gears, we all want to be as informed and as smart as you are about the space. So can you give a little bit of color or examples of what you like to listen to, what you like to watch, what you like to read to be informed?
kelly rodriques (34:39.022)
Okay, let me start with the easy one. I may be late to the game, but I'm a big Shogun fan. Not helping me with my alternative investing, but it is pretty compelling. You know, I guess reading, we have an enormous data gathering machine here. We scrape everything about every private company.
And so we have something called the Forge Private Market Index. And I swear this is not a promotion, but this is something that comes out every month. We do an investor roundup quarterly. That to me is the best source of what's going on in the private market that we know of in the world. And so that is what I look at if I'm really trying to figure out what's trading, what bid -ask spreads, what I should be paying for something.
Like I get fired up about a company the same way anybody else that reads the news does. And then I go back and say, okay, what can I find out about them? What's been published? What does the data say and is it viable? And if so, at what price? So that's sort of going right down into the ground level of it. Um, I'm looking for podcasts and insights just like everybody else. In fact, I just heard about this podcast.
not long ago and I was asking, Hey, uh, you know, who's Slava and let's, let's figure this out. I kind of interested in what, what some of the guests on that show have to say. And I, and I know a bunch of your guests, so it's kind of funny. You had the Republic guy on and you, and you had Rebecca in from a deal maker, I think the world of her. Uh, so I listened to a lot of the people out there that are, that are talking about it. I'm also talking to venture investors on a fairly regular basis.
to try and understand a lot of the viewers might not have that access, but some of those investors do talk. And so that's something that I look for as well.
slava (36:49.733)
The Forge Private Market Index, is that something that we can get access to if we sign up and we can see it or is that something that you use privately?
kelly rodriques (36:58.03)
Oh no, oh no, you could sign up to that now. I'm happy to send you the most recent version of it right when we get off.
slava (37:06.629)
Amazing. I'm also asking on behalf of the listeners. So the last question I'm putting you on the spot, which is we asked this of all of our guests, three years out, you know, we'd like to pick a choice today that what would you invest into specifically that three years out you think is going to be a solid performer. So, you know, you can give us one or two, but we don't want to hear broad stroke ideas. We'd like to hear specifics.
so we can objectively review it and see how it did. So what would you invest into today that three years out you feel strongly about?
kelly rodriques (37:48.366)
Okay, if I had to pick one name...
And I'll pick one name. If I had to pick one name that I'm personally interested in three years out, it's probably Anthropic.
slava (38:03.237)
Nice. So obviously that fits inside of your six AI LLM companies. You didn't choose some of the others. Can you give us some of your thought process there as to a couple things? One, not why AI, that seems quite obvious, but why this AI company versus the other AI companies and why at quote unquote today's price, which you obviously have some visibility on and anybody can check in on that versus
you know, is that higher or low?
kelly rodriques (38:36.27)
Um, I think, I think the space is, um, is, is pretty crazy right now. Uh, and obviously, um, open AI is, is just off the charts. Um, and so if, if, and I'm not making a statement of, uh, of valuation here, um, but I am, uh, of the mind that if you look across the landscape of the, of the top handful of names that are really,
in a position to dominate. I'd say the combination of the Amazon deal to create infrastructure that fuels the entire universe of AI enabled players. I think there's a difference too, between the guys that are building large language model businesses and the people who are essentially AI enabled by some of these.
Um, I think that there, that we're at a really interesting moment right now. And there's probably 200 names that are not in that top sort of five list, but I'd say, um, I'd say anthropic to me is, is, is the fast follower. And I always liked the fast follower, uh, in the early stage. So, um, I liked that name.
slava (39:55.012)
Wasn't Google a fast follower?
kelly rodriques (39:56.526)
They were. Google was a fast follower. Yes, I could make the argument that Tesla was a fast follower.
slava (40:04.389)
Amazing. Thank you so much. This has been a great discussion just to cover what we discussed. You come from wearing so many hats and so much experience of being a founder, taking a company public, but didn't really go public. But then with CEO of multiple companies was a VC. Back in the day, you were going to go public at 500 million, but that is really not even possible today. Now you have to go at like 4 billion. These days companies are more like 12 to 15 years old. So there's a ton of opportunity to find.
these investments in the private markets. There's probably between 800 to 900 unicorns that are out there, if not 2000 that are over 500 million, which is a vast opportunity of investment potential. The ZERP market has changed and now we're back to normalizing. So it'll be interesting to see where that all goes. You're definitely into alts as you invest about 50 % into alts, a lot of into venture and then into some other assets. Obviously, Forge Global is
very large and doing incredible work with over 2 million investors, $1 to $2 billion of transaction volume a year, transacting over 500 names, 1 to 200 in the past 12 months, and really working to democratize this towards the people going from the investible index to qualified, then to accredited, and hopefully one day with a 40 act to retail. You predict that in the back half of 24, we're going to see more IPOs, which is already starting to crack open with Reddit and others.
You're hearing the rumors about Chime, SpaceX, Android, Epic Games, Scale AI. So there is that time that seems that before they actually go IPO that you should try to get in, in that six to 12 months as it's starting to ramp up. So you like Shogun, which we haven't heard yet, which is awesome. And we all need to read or take a look at the Forged Private Market Index. And last but not least, you told us your bet or your investment better is Anthropic.
Fast follower is very interesting. Thank you so much, Kelly. This was awesome.
kelly rodriques (42:04.846)
Thank you, Slava. It's very nice to meet you.
