The last few months have been marked by headlines and volatility across the public markets, which have only been exacerbated in recent weeks and days as global economic uncertainty swells.

There are multiple levers at play — from inflationary pressures to geopolitical shifts and fluctuating interest rates to, of course, tariffs — some of which are unprecedented in both scale and speed. At times like this, it’s natural to be curious about what’s going on and what it means for your investment portfolio.

During times like these, our conviction in our mission and purpose at The Cashmere Fund has never been more clear. Portfolio diversification, including diversification into the private markets, reflects a strategy long used by high-net-worth investors to weather storms across market cycles. The Cashmere Fund aims to bring this access to more people.

Endurance Through Diversification

Diversification within and across asset classes is a foundational investment strategy. In a public portfolio, this may include a mix of blue chips, growth stocks, and small caps. In a venture portfolio, as is the case with The Cashmere Fund, this might include exposure to different varieties of companies operating within different categories and industries. 

Historically, high-net-worth and ultra-high-net-worth individuals have allocated up to 50% of their portfolios to alternative investments like venture capital, private equity, and real assets. These assets aren’t just about the potential for high returns; they can also offer resilience since they tend to be less correlative to volatility in the public markets

Image via AngeList

Unlike public stocks, whose prices can swing by the second or based on a single social media post, early-stage private investments tend to be more grounded in long-term fundamentals. While not immune to price swings, their value isn't typically as dictated by short-term sentiment or quarterly earnings reports. This is one of the reasons that venture capital, private equity, and other alternatives can often maintain strength during turbulent public market cycles. 

We believe in the long-term growth potential of the businesses we invest in, and therefore operate on a multi-year time horizon that we believe is less likely to be impacted by short-term volatility when smoothed out over time.

What Makes Early-Stage Companies Unique

Startups like those in The Cashmere Fund are earlier on in their journey. They are often nimble, adaptable, and not yet burdened by rigid systems or legacy infrastructure. This agility allows them to potentially optimize supply chains, pivot around headwinds, and make strategic moves that public companies can’t always pull off.

This is not to say they’re immune to risk – indeed, all investing involves risk – but they do tend to operate under a different set of conditions at times. And they’re fueled by founders, teams, and investors (like yourself) who are often building not for the next quarter, but for the next decade.

The Cashmere Fund’s Resilience

The Cashmere Fund has shown remarkable resilience. We consistently outpaced the performance of the Preqin Venture Index (by 28.4% as of Q3 2024) — a meaningful signal of strength in our view when benchmarked against our asset class. While many public market indices have experienced sharp swings, several of our portfolio companies have continued to scale nationally, expand into retail,scale revenue, and close major funding rounds.

The Cashmere Fund (CSHMX): 4/8/2025 Snapshot

Our approach — rooted in compound influence and long-term behavioral shifts — is designed for this moment, we believe. The startups in our Fund reflect durable trends, in our view, not fleeting fads, and our fair valuation process aims to provide you with a realistic and compliant picture of where we stand today.

The Role of Venture Capital in a Modern Portfolio Mix

Alternative investments like venture capital offer something different: they move to a different rhythm. Going a level deeper, interval funds, like The Cashmere Fund, bridge the gap between traditional private equity and public markets by offering biannual redemption opportunities, transparency, and diversified exposure to potential high-growth startups. While we believe the Fund is best for investors eyeing a long-term holding period (5–10 years), we’ve built in liquidity windows to provide greater optionality. 

This model allows everyday investors to tap into a strategy that has long been the domain of institutions and family offices. 

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The U.S. startup ecosystem remains one of the strongest engines of innovation in the world. Small businesses and startups are the bedrock of the American economy, in our view. They create jobs, drive culture, and shape the future of industries.

And while uncertainty may cloud the markets, it often fuels opportunity. Historically, certain periods of dislocation have proven to be advantageous times to invest in early-stage companies, where prices may be more favorable, innovation is often accelerating, and the next generation of category-defining businesses is being built. 

Your belief in what we’re building means everything. If you have questions about the Fund, our investment approach, or how we’re navigating this market, don’t hesitate to reach out to cashmere@sweaterfunds.com.. 

You can also keep in touch with us here on our blog and LinkedIn. We regularly share updates, educational insights, and behind-the-scenes looks at our portfolio companies.