Mark Lee: I’ll give you some anecdotal views, and we try to stay close to the top competitors. What I mean by that is we have a reasonably regular check-in and dialogue just to see what other people are seeing. We are not seeing rate pressure. And if anything, the fact that you saw a 3.7% take rate back in quarter two is an indication that if anybody is going to be applying rate pressure to the market, it’s probably us. And I’d say most of what we’re seeing out there is an indication that the rest of the market is still incredibly fragmented. So we don’t see the same names consistently. And if anything, we believe that our competitive set has struggled to raise capital. And so most of our competitors have really had to skinny up their staff, and in some cases, we’ve been the beneficiary of that.
And so as we look at market prospects competitively, this is not a time where our competitors are investing. Most of them are in cash preservation mode. My comments about our own cash burn mentality is really important. But if you think about it, through the lens of somebody who is a competitor that doesn’t have a balance sheet and is struggling through periods of difficulty in terms of volume, I think a lot of the competition out there is nervous and is being extremely conservative in terms of their investments in staffing or anything that burns cash. So I’d say that if anything, our competitors are going to try and harvest as many trades at the highest take rate that they can in order to continue to stay afloat. But a protracted period, I think, is better for Forge, relatively speaking.
But we take everybody seriously. But we haven’t seen any new entrants that really concern us, although we’re always going to be looking over our shoulder and taking inventory of who’s coming and trying to compete.
Kelly Rodriques: Hey, Jeff, I would want to add, just as a reminder, I know you know these things, but we’re the one company that is a public company in this space. I think we have a stronger balance sheet than most all of our competitors. So we have the scale. Forge and SharesPost were early movers in this space. And I think that when you think about just the team we have that we put out in the playing field, and that’s our private market specialist team, our operations team, the legal and compliance types to support them, the technology that we’ve built, the data product, the custody solutions, the lending product, I mean I know I’m — it sounds like an advertisement, but I think when you think about us versus our competitors, I think we feel really good about where we’re situated. And I would say the last 21 months have been difficult for everyone, but probably much more difficult for our competitors than for Forge.
Jeff Schmitt: Okay. And then I don’t think you mentioned it, but how do right of first refusal trends look? I think they jumped quite a bit in the first and second quarters, but did they remain at those levels? Or how are they trending?
Mark Lee: So what we’ve been reporting in the Forge Investment Outlook, Jeff, specifically is the number of issuers that are still — that have done a ROFR in the current quarter. And that number stays relatively elevated in the slightly over 20%, both in Q2 and Q3. So the number of issuers that are doing ROFRs is still at historic highs compared to kind of what we’ve seen in the past.
Jeff Schmitt: Okay. Very helpful. Thank you.
Operator: Your final question comes from the line of Alex Kramm with UBS. Your line is open.
Alex Kramm: Hello, again. Just a couple of follow-ups from prior discussions, if I may. On the competitive environment question, maybe to turn that question around a little bit, I mean not surprisingly, some of your competitors are probably struggling a little bit more than you are. So just wondering to what degree that’s increasing your appetite for any sort of consolidation in that space. Does that make sense right now? Or are the bid-asks still too wide in the space in general? Or are there other areas outside of maybe direct competition that you’re becoming a little bit more interested in, as you have still some firepower versus others?
Kelly Rodriques: We love the idea. And part of the reason we went public was to use our currency and our scale to selectively and carefully consider consolidation. I’d say the competitors in the space are no different than anybody else that’s in the private market right now that is struggling with the reality of what valuations have looked like, not only within their customer base, but for their own cap tables and their own ability to raise money. So I’d say that today, we’re watching and we clearly see some companies out there that we like, but we also believe that it’s really important that we focus on our own organic performance and demonstrate to our shareholders and the broader market that Forge is a company to support.
And as long as we’re getting support from the broader investment community, we will look to use our currency to consider consolidation. Now obviously, the last couple quarters, the last 1.5 years has been tough. But I think as we’ve seen some modest improvement in our share price and continued focus on performance quarter-over-quarter, I think it will become a reality for us to look at in 2024. And I’d say we’re also open to inbounds. We have had companies call us and investment banks call us and say, hey, there’s opportunities out there in the market, but we’re going to be really careful, very selective. But I do think there are some opportunities. But I’d say first things first, we’re going to stay focused on incremental improvement and prove that we can deliver quarter-over-quarter as we move into 2024.
