Episode summary
What LPs Really Want From Venture Funds
Swimming With Allocators
· · 39 min · Hosts: Alexa Binns, Earnest Sweat · Guests: Rachel Kloepfer, Michael Podolny
Summary
Rachel Kloepfer argues that allocator work in venture looks a lot like investigative journalism: the best diligence comes from unscripted questions, follow-ups, and checking whether a manager’s story matches reality. She says her background in crime reporting taught her to backchannel, use public records, and press on uncomfortable topics, and that those habits now help her evaluate both emerging managers and mega funds.
A major theme is that venture is increasingly a people business, not just a numbers business. Rachel says large firms can win on brand, but emerging managers live or die by the individual GP’s network, sourcing edge, and ability to build media reach. For top-tier funds, she emphasizes inconsistent reporting and the importance of looking at DPI and the ability to return capital, especially because her clients are families and not perpetual endowments.
She also argues that succession planning is becoming a bigger risk for brand-name firms, because allocators need confidence that access, relationships, and culture will survive as founding partners age out. Looking ahead, Rachel thinks the “media wars” in venture will intensify, with owned media, storytelling, podcasts, Substack, and video becoming central to how firms attract founders, talent, and LPs.
Key takeaways
- Rachel says journalism prepares investors to ask sharper questions, follow up aggressively, and verify what managers claim through public records and backchanneling.
- Rachel says DPI matters more for her clients than for endowments because families need real distributions on a finite timeline, not a perpetual paper return.
- Rachel says megafunds still win on brand, but emerging managers are judged more on the GP’s personal network, sourcing edge, and ability to create access.
- Rachel says weak succession planning can make even elite firms less attractive if key partners retire and the firm loses the relationships that drove its deal flow.
- Rachel expects venture’s media wars to intensify, with owned media becoming a core tool for control of narrative, founder reach, and talent retention.
Notable quotes
“I feel like we end up making a majority of our decisions in a large way influenced by like our conversations with people”
“I think that sourcing is really something that is easy to give a very blanket answer to”
“at the end of the day DPI is really really important when we don't have a perpetual uh timeline”
How the episode opens
Welcome to Swimming with Alligators, — The VC podcast from the LP perspective — With your hosts Alexa Bins — And Ernest Scott. You ready? Let's dive in.
Rachel, thanks for being on Swimming with Alligators. It's a pleasure to get to talk to you, uh, especially because of your very interesting background that we have a lot of respect for. Um, but I wanted to start the conversation with you just kind of telling your origin story.
Um, you grew up outside of Seattle on a farm like like Superman. And so, uh, and then took paths through journalism, finance, and now, uh, you're an alligator. So, could you just walk us through kind of like your origin story?
Yeah, it's funny. I grew up about two Well, as the bird flies is a different story than traffic, but I grew up towards Mount Rineer from downtown Seattle. um very small town called Raven Stale.
I there wasn't a high school there. We went to high school in like the larger suburban area next to us. I worked on a horse ranch.
Um friends and family boarded horses and had cows and it was it was the whole nine yards. So very different from living in downtown and kind of pursuing this career path. But with that um I grew up with a tech family who worked remote before remote work was really even a thing precoid and all of that.
So I had some exposure to like what was happening in the city um through my parents which was obviously awesome and being here in Seattle through the tech boom of the early 2000s and Microsoft and whatnot was very exciting and so I have a deep attachment to being here. So then I went to school in Utah, so far Town Part Two basically, and I went to the University of Utah in Salt Lake City, and I started out in journalism.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- lp due diligence
- venture fund selection
- dpi and fundraising timelines
- owned media in venture
- ai tools for legal workflows
Companies and tickers mentioned
- Lenora Capital
- Brighton Jones
- Sidley Austin LLP
Watch the episode
Watch “What LPs Really Want From Venture Funds” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
More from Swimming With Allocators
Swimming With Allocators, this episode and its artwork belong to Earnest Sweat, Alexa Binns. Octagon is not affiliated with the show; this page is an independent summary.
