Diversifying Concentrated Equity, Private Market Access, Reporting, and Fees
This FAQ is for founders, entrepreneurs, and early employees navigating a liquidity event or managing concentrated equity after one. It explains how Caprock approaches diversification, portfolio construction, private market access, consolidated reporting, secondary liquidity, and fees through a fiduciary, open-architecture model.
How does Caprock help entrepreneurs diversify concentrated equity after a liquidity event?
Caprock helps entrepreneurs diversify concentrated stock by building an endowment-style portfolio around liquidity needs, tax optimization, and long-term goals. Acting as an outsourced CIO, Caprock oversees portfolio construction, manager selection, and ongoing adjustments as wealth transitions from a single asset to a broader balance sheet.
For many entrepreneurs, the challenge is not diversification in theory. It is figuring out how to diversify without losing sight of near-term cash needs, tax consequences, and the realities of the years immediately after a liquidity event. Caprock approaches that work as an outsourced Chief Investment Officer, building portfolios across six broad asset classes: cash, fixed income, public equity, private equity, real assets, and alternatives.
Because Caprock operates with an open-architecture model, portfolio decisions start with the plan rather than a proprietary product lineup. Planning is grounded in lifetime cash-flow modeling and liability mapping so spending, taxes, and known obligations are matched to the appropriate mix of liquidity and growth. From there, Caprock’s team handles manager due diligence, rebalancing, and ongoing oversight as markets and client circumstances evolve.
What private markets access does Caprock offer entrepreneurs after a liquidity event?
Caprock gives eligible clients access to private markets opportunities, including venture and private equity along with co-investments, within a broader portfolio strategy. The focus is not simply access. It is deciding how much illiquidity makes sense, when, and in what role within the overall balance sheet.
For post-exit entrepreneurs, private markets can add meaningful return potential, but only when commitments are sized with liquidity and concentration in mind. Caprock’s private markets program includes venture capital, private equity, real estate, private credit, and alternative credit, along with support for evaluating co-investments when appropriate. Caprock’s team performs underwriting and diligence, helps clients think through commitment pacing, and pressure-tests how new illiquid investments affect cash needs, portfolio risk, and the broader plan.
How does Caprock report on complex holdings across public and private investments?
Caprock uses an Addepar-integrated reporting platform to give clients one view across liquid and illiquid holdings. Reporting is typically delivered monthly and can be expanded when clients need deeper analysis around planning, liquidity, or transactions.
That means public equities, private funds, direct investments, real estate, and alternative credit can be viewed in one place rather than across disconnected statements and spreadsheets. Caprock’s reporting team supports reconciliation and data quality, while the platform tracks private fund activity such as commitments, capital calls, distributions, and co-investments. The result is a reporting framework designed to help clients understand not just what they own but how the full balance sheet is performing.
How does Caprock help entrepreneurs evaluate secondary sales of pre-IPO or startup equity?
Caprock helps founders and early employees evaluate secondary sales by looking at transfer rules, valuation, timing, tax impact, and how a sale would change overall concentration and liquidity. The analysis is meant to answer a practical question: does selling now improve the broader plan?
Secondary liquidity can be useful before an IPO or broader exit, but it comes with real constraints. Caprock helps clients work through eligibility, how pricing may be set, how right-of-first-refusal processes typically work, and how tax considerations such as Qualified Small Business Stock (QSBS) could affect the net outcome. If a transaction makes sense, Caprock models the proceeds within the client’s broader plan and coordinates with legal and tax advisors, so execution remains aligned with transfer restrictions, diversification goals, and future liquidity needs.
What is Caprock’s fee structure, and how does it support a fiduciary model?
Caprock is fee-only, which means Caprock is compensated by clients rather than by commissions or product sales. That structure is intended to keep advice aligned with the client’s plan and delivered under a fiduciary standard.
Depending on complexity and scope, fees may be structured as an asset-based fee or a retainer. Because Caprock works in an open-architecture model, manager and strategy selection is based on fit rather than a requirement to use proprietary products. In practice, that helps keep advice transparent, clearly disclosed, and tied to the client’s broader objectives.
Preserve and grow your wealth with Caprock
©Caprock. All rights reserved. The Caprock Group, LLC (“Caprock”) is an SEC Registered Investment Advisor. This communication is not an offer or solicitation with respect to the purchase or sale of any security and is for informational purposes only. Information contained herein has been derived from sources believed to be reliable, but Caprock makes no representations as to its accuracy or completeness. Investment in securities involves the risk of loss. Past performance is no guarantee of future returns. Registration with the SEC does not imply a certain level of skill or training. Caprock, its Employees, Affiliates and Advisers are not tax or legal professionals and do not provide such advice. Therefore, the discussions contained herein are for informational purposes only and should not be construed as a recommendation or endorsement of a strategy. Please consult with your tax or legal professional for further guidance and information. Caprock invests client capital through a variety of structures, including blended vehicles and direct investments.
