Partner Funds
Insights
Get excited, we have a great edition of The Spool in store for you this month - it's a 5-minute read.Â
In August's edition:
So let's dive in!Â
Venture capital can ignite innovation, empower entrepreneurs and drive positive societal change while also historically yielding impressive returns. But groundbreaking ideas and technology take time to build and disrupt the industries they impact. Because of this, investing in Venture should be looked at as a 5-10 year investment horizon.Â
This long-term investment horizon gives startups the time they desperately need to grow from a handful of employees to a booming business ready to exit, with the potential to offer remarkable returns to early investors. We’re looking at you Airbnb, Workday, Slack, Microsoft, Google, Uber, WhatsApp, Venmo, Square... you get the gist. But let's dive into what that means.Â
Just take a look at WhatsApp, which was acquired by Facebook in 2014 for $22B. The only investor in WhatsApp was Sequoia Capital, whose $60M investment over two rounds turned into $3B in just three years.Â
Then there is Workday, which earned VC investor Greylock Partners a 9x return when Workday made its IPO in 2012. They first invested in 2005.Â
We can't forget Google, whose IPO earned Sequoia Capital and Kleiner Perkins a 300x return in just five years.Â
VC as an asset class traditionally falls within the long-term time horizon. This is important to factor in when developing an investment strategy that includes Venture Capital, as it can help you align your investment goals with your risk tolerance and time frame for achieving those goals. According to Prequin, early-stage venture investments have a track record of outperforming the S&P, Russell 2000, Real Estate, and Private Debt, proving the potency of VC's mid-term approach.
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Investors with a longer time horizon may be willing to take on more risk in their investments, as they have more time to recover from any potential losses, whereas, investors with a shorter time horizon may be more conservative in their investment approach, focusing on safer investments that are less likely to fluctuate in value.Â
The beauty of venture capital lies in its capacity to foster innovation, create a positive impact on society and provide diversification across multiple time horizons for your investing strategy. Â
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Natalise Kalea Robinson is the co-founder & CEO of Parallel Health, a visionary company specializing in microbiome testing for personalized skin solutions. Collaborating with her co-founder, Dr. Nathan Brown, they developed a groundbreaking product line based on the belief that precision and personalization is the future.Â
Natalise’s biggest struggle has been defying societal expectations and finding confidence despite not fitting the conventional mold. Growing up with a passion for singing and songwriting, she overcame rejection to become a signed recording artist during her time at Stanford University. Overcoming societal expectations and barriers, she became a founder who continues to fearlessly pursue her goals. Her parents, immigrants from Myanmar, instilled in her the values of grit, resourcefulness, resilience and hard work.
Natalise's determination to embrace her true self and advocate for precision and personalization fuels Parallel Health's success which has earned her Entrepreneur Magazine’s Top 10 Inspiring Healthcare Entrepreneurs to Watch in 2023. Her journey serves as an inspiration for innovation and empowerment in the world of healthcare.
Every month we feature a Cashmere Fund Port Co Founder or Sweater Member. Would you like to be featured next month? Click here to introduce yourself. 🤝 Â
The Cashmere Fund: Q2 2023 Quarter in Review
Tuesday, August 15thÂ
12:30 PM MDT
Join Cara Morphew, Partner, and Robin Riddell, Director of Fund Operations & Valuation, as they review Q2 2023 and answer your questions live.Â
Colorado Startup Community Coworking Day!
Thursday, August 24thÂ
9AM MDT - 5PM MDT
Calling all Colorado Members - co-work together at Founder Central in Boulder! Take the day to enjoy the unique energy of working alongside other Front Range startuppers every third Thursday of the month. Register here.Â
Have questions? Join Sweater Office Hours
Meet our Member Experience team for an in-depth discussion around Sweater and get all your questions answered. We're here to help make venture investing as easy as possible.
Get your Sweater fix on-demand. To view our entire library of on-demand content, click here.Â
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Investing in venture capital can be a daunting task for individuals who are just starting to explore this asset class. There are numerous variables to consider and understand before entrusting your money to someone else. That's where Sweater comes in – read how here.Â
Sweater is now on Reddit! Join the community here to talk all things venture capital and Sweater with other Members!
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How returns are calculated:
The Private Capital Quarterly Index calculates the quarter-to-quarter changes in the returns on invested capital. Index points are rebased from a set date. All indices are rebased from a fixed date to make comparisons across indices. This is done by basing the index to 100 and then adjusting each quarter using the quarterly percentage return calculated. The change in yearly returns was determined by subtracting the subsequent year's value from the initial value of the yearly period.The chart featured shows the average annualized returns over the past 15 years.
Calculation of Returns: The highlighted returns for Real Estate, Private Debt, Venture, and Venture Early Stage represent an index of average returns earned based on the actual amount of money invested. Each data point is individually calculated from the pool of closed-end funds as of both the start and end of the quarter. For the Russell 2000 and S&P 500 indices, publicly available data was used. Index returns were tracked using this data and rebased to Dec 07 for consistent comparison.
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