I asked Rachel Kloepfer what she actually asks fund managers. Not the scripted portfolio construction question. The one that gets her an answer she would not otherwise get.
She started with what does not work. A manager says sourcing, then says events, then says a network from whatever large company they worked at. “That’s an obvious give,” she said. Then community building, which she flagged as a buzzword before I could. Then the question itself: “pull up your calendar and let’s talk about what you’ve done this week, last week, whatever.”
That request is good because it cannot be answered with a narrative. Everything above it can.
Rachel spent her first career in investigative and crime reporting before landing at Lenora Capital, the private investments arm of Brighton Jones. Most of what I took traces back to that.
Three things.
First, the edge is the records, not the questions. I expected the journalism answer to be about asking hard things of people who do not want to talk. She said that, and it is real. The sharper piece was procedural. She filed a lot of public records requests, and the skill that transferred was knowing how the request process blocks access to information that is already public by law. Mess up the form and you lose a month. Know it and you get in. She described knowing “who you needed to get on the phone and yell at” at day thirty. She now uses FOIA to pull endowment and pension investing strategies and watch how they shifted over time, since all of that has to be publicly filed. I have been around this seat for years and had not thought of that as an LP tool.
Second, my own analogy came back to me changed. I put the barbell to her as an NFL team against a tennis pro. The big firm has a brand that moves on its own. The emerging manager is one person walking into tournaments on their own merits (and own money, look up how a professional tennis player operates!!!). She took the framing, then put the advantage somewhere I did not expect.
The standard pitch runs the other way. The emerging manager claims the fast categories and the mega fund is the safe institutional choice. Rachel’s read: if you are underwriting SaaS or consumer, distribution is the moat, and in her personal opinion you want to be with a big fund. Where a smaller GP is genuinely strong is niche knowledge in a hard industry. She listed life sciences and bio, hardware, anything selling to the government, anything tied to blue collar logistics. In those, the knowledge is the moat.
Her reasoning is what makes it hold. Nobody can forecast this market, GPs included. “There is no all seeing eye that’s going to have the right answers.” So the riskier and faster the area, the more she wants it sitting with a firm that has enough manpower and brand power that “they can will their way through it.” That is not a quality judgment on the manager. It is a judgment about what survives being wrong.
Third, succession planning is a live reason she says no. Not a governance checkbox. She described firms she would have said yes to at first touch, among the best she can think of, that got a no on succession alone. The mechanism is specific. A GP who was senior at Google pulls founders out of that orbit because those founders respect the relationship. When the GP goes, the pull goes. The commitment does not. A ten year fund with extensions, re-upped to hold an allocation, means in her words “we’re looking at a 20 year relationship.” The line that stuck with me was about opening a deck years in and not recognizing a single name on it.
Where I am not settled is what that does to the media argument. Rachel thinks owned media decides the next decade. Streaming wars, entertainmentification of the whole economy, an A16Z documentary she would not be surprised to see. Eyes bring LPs, founders, talent, and deals at more disciplined prices. I co-host a podcast about LPs, so I did not need convincing. This conversation confirmed what I already believed rather than changing it, and I would rather say that than manufacture a turn.
But she also said the underinvestment in succession happens partly because so much focus goes to the media presence of the firm. Those two sit uneasily next to each other. The same build that wins attention now may be the one starving the bench that has to carry the brand in year fifteen. I did not push on it in the room. I do not know how she would resolve it.
Kelli Fontaine came at this from the other end on episode 105. Her team runs 78 dashboards and she is the most data-forward allocator we have had on. Rachel came in from crime reporting. They land in the same place. There is tactical benchmarking, Rachel said, and then there is the person to person work that sits “outside of what you can put on a spreadsheet,” and she called that second part a finger to the wind. Two unrelated careers, same conclusion about where the numbers stop.
The calendar question is what that conclusion looks like once it is operational. Not more data. One question a story cannot survive.
Listen here: https://swimmingwithallocators.com/podcast/what-lps-really-want-from-venture-funds/
With gratitude,
earn