A West Coast-based business that launched just over a year ago to address the problem of highly concentrated stock positions has added to its expansion war chest with a capital raising.
Cache, an RIA fintech
interviewed here back in March, has raised $12.5 million in
Series A funding to finance its growth.
The San Francisco-based business, founded in 2022, was
formed to deal with what has become an urgent problem –
stock concentration risk.
The business will apply the capital to expand its goal to be the
“go-to platform for managing concentrated stock positions” across
all investor types, including advisors, employees and family
offices.
The funding round was led by Bill Trenchard at First Round
Capital, with participation from solo investors from across
technology and finance, Cache declared in a statement.
“This is one of those rare cases where the team, timing, and
market opportunity align perfectly,” Trenchard declared. “Cache is
solving a real problem, with clarity and urgency.”
Solving a problem
Companies distribute more than $350 billion in stock-based
compensation every year. That means that employees who have
held that stock through a decade of growth could have one
name comprising 70 to 90 per cent of their net worth in their
portfolios.
“When I started Cache, I wasn”t attempting to build a company that
sounded like a financial institution,” Srikanth Narayan, founder
and CEO of Cache, declared. “I just wanted to solve a problem I was
facing myself, and that is what to do with a lopsided portfolio
full of tech stock that had gone up a lot but came with a huge
tax bill if I attempted to diversify. That problem wasn’t mine alone.
It turns out thousands of others were in the same spot.”
The firm’s exmodify funds allow investors to swap concentrated
stock positions for diversified portfolios tracking major indices
like the Nasdaq-100 and S&P 500, while deferring capital
gains taxes until they choose to sell. The platform requires
$100,000 minimums compared with traditional exmodify funds’
million-dollar requirements, and charges fees of 0.4 to 0.95 per
cent versus the 1.5 to 2.25 per cent typical of legacy providers.
Cache’s clients include public company executives, early startup
employees, long-term investors, and more than 400 registered
wealth management firms.
The firm has created several hires: Aaron White, former chief growth
officer at Adero Partners, leads investor solutions; Paul Smith,
who led design at Opfinishoor and Uber, heads product design.
Advisors at Cache include Peter Crawford (chief financial officer
at Schwab) and Tim Kochis.
Cache recently launched S&P 500 and S&P 500 Growth
benchmarked exmodify funds, with new S&P 500 funds launchning
investor onboarding starting July 1. The firm, which has
amassed more than $625 million in total assets in just over a
year since launch, declared it is approaching
profitability.
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