In 2022, Srikanth Narayan found himself experiencing a problem faced by many employees of technology companies: too much net worth tied up in one company’s stock.
In his case, it was Uber, but the problem of a lopsided portfolio is not uncommon — especially when employees of large publicly traded tech companies received stock as a signing bonus, and then more stock over time. It’s the classic example of having all your eggs in one basket.
In some cases, this can work out just fine and a stock will only grow over time. However, depending on the company, a stock can be volatile (ahem, Tesla), which can be a cause of great employee anxiety.
On top of that, the challenge in trying to diversify by selling some of that stock means facing “a huge tax bill” in the form of capital gains, noted Narayan.
“That problem wasn’t mine alone,” he recalled. “It turns out thousands of others were in the same spot.”
So Narayan founded Cache, a San Francisco-based startup he describes as a specialized brokerage for managing large stock positions.
“Think Schwab, but exclusively for people with concentrated stock holdings,” Narayan said.
Cache’s flagship product is what’s called an exchange (or swap) fund that lets investors diversify without triggering capital gains taxes — a strategy the entrepreneur said was previously only available through Goldman Sachs and Morgan Stanley‘s private wealth divisions.
“They often came bundled with a private wealth relationship that required a $10 million-plus net worth, minimum investment of $1 million, and fees that could reach as high as 2.5% per year,” he told Crunchbase News.
A stock pool
Cache’s offering is more accessible and available to all accredited investors in America, Narayan said.
To begin, the startup dropped minimums from $1 million to $100,000. It also cut fees by 50% to 75%, Narayan claims, and made its product direct-to-consumer (although it does also partner with wealth managers).
“We’re the first exchange fund built around the Nasdaq 100 and offer biweekly onboarding versus competitors’ quarterly cycles,” he said.
An exchange fund, as Narayan describes it, is “essentially a bunch of people coming together and pooling all of their stocks in one particular fund.”
“And when it is structured a very specific way, you don’t trigger any capital gains. So everyone is diversified by virtue of participation,” he said.
Cache lands Series A, approaches profitability
And now, Cache told Crunchbase News exclusively that it has raised $12.5 million in a Series A funding round led by First Round Capital at a post-money valuation of $125 million. That’s up from the $30 million it was valued at when it closed an $8.5 million seed round in March 2023.
More than 60 angel investors also participated in the financing, including Amar Hanspal, former CEO of Autodesk; Tim Kochis, founder of Aspiriant; Zach Abrams, founder of Bridge, which was acquired by Stripe; and Brian Hale, chief growth officer at DoorDash. Quiet Capital, an investor in Cache’s seed round, took pro rata and also participated. In total, Cache has raised $21 million in funding.
“This is one of those rare cases where the team, timing and market opportunity align perfectly,” said Bill Trenchard, partner at First Round Capital. “Cache is solving a real problem, with clarity and urgency.”
Since its March 2024 launch, Cache has more than $600 million of assets under management across 30% of the Fortune 500. It is “approaching profitability,” according to Narayan.
Ninety percent of the startup’s clients are using an exchange fund for the first time, he said, which “signals the massive market in front of” Cache. The average investment per investor exceeds $900,000 and Narayan claims that the average capital gains deferred per investor is above $750,000.
“Cache gave me a way to protect my portfolio and diversify without taking a tax hit. It’s rare to find a product that’s both powerful and simple,” said Joel Meek, former VP at Reddit, in a written statement. Clients hail from companies such as Netflix, DoorDash and others.
Diversifying away from volatility
Over the past year, Cache has seen heightened interest from investors looking to diversify their Tesla holdings, according to Narayan.
“Spots for Tesla within our funds have become increasingly competitive,” he said.
That heightened interest is likely in light of recent headlines surrounding Elon Musk and President Donald Trump that have sent Tesla’s stock on a roller coaster ride.
In the end, rather than increase a person’s risk, Cache is out to help reduce it, Narayan said.
“Almost every single day, we meet somebody who’s worked at Microsoft for 25 years, and 90% of the net worth is just Microsoft stock, and they own a home, and they have some other assets,” he told Crunchbase News in an interview. “There are also a lot of extreme stories where 98% to 99% of the net worth is Apple stock or Nvidia stock or Amazon stock. We are making the market aware: ‘don’t hold too much of your net worth in one stock.’ There are a lot of stories of companies not performing to your expectations, and wiping away all of that wealth.”
Potential market size
The market potential is indeed huge. Technology companies dispense more than $350 billion in stock-based compensation annually.
For employees who have held that stock through a decade of growth, the result is often a portfolio with one name comprising 70% to 90% of their net worth.
As a bespoke brokerage, Cache’s initial target market is tech employees at large, public companies, who receive generous equity compensation. For example, the Nasdaq 100 is up 1,800% in this bull market, Narayan pointed out.
Cache operates as an SEC-registered broker-dealer and investment adviser, with client assets held at institutional custodians, including BNY Mellon. The platform provides Securities Investor Protection Corp. protection up to $500,000 per account, plus additional private insurance coverage.
The 12-person company recently launched S&P 500 and S&P 500 Growth benchmarked exchange funds.
First Round’s Trenchard told Crunchbase News via email that he’s always liked to “nerd out” on personal finance and estate planning. He had long felt that stock overconcentration was “a real, compelling problem, and that this particular demographic was very underserved when it came to accessible wealth management solutions.”
“The idea of bringing these products and tools for the super wealthy down market struck me as a very smart one,” Trenchard added.
The investor said he was also compelled by how product-oriented Narayan is.
“He was not just building another finance company but a true end-to-end platform that made all parts of operating a wealth management platform a lot simpler and less expensive,” Trenchard noted. “It’s not just a sleeker interface — it’s a structural innovation that solves a real pain point with a smarter, more accessible solution. I believe it will resonate in a way others haven’t.”
Illustration: Dom Guzman
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