What LPs Really Want From Venture Funds

0:03Rachel Kloepfer: Welcome to Swimming with Alligators, the VC podcast from the LP perspective. With your hosts, Alexa Benz and Ernest Slecht. You ready? Let's dive in. Rachel, thanks for being on Swimming with Alligators. It's a pleasure to get to talk to you, especially because of your very interesting background that we have a lot of respect for. but I wanted to start the conversation with you just kind of telling your origin story. You grew up outside of Seattle on a farm like Superman and then took paths through journalism, finance, and now you're an allocator. So could you just walk us through kind of like your origin story?

0:45Yeah, 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 Rainier from downtown Seattle. Very small town called Ravensdale. 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. Friends and family boarded horses and had cows, and it was the whole nine yards. So very different from living in downtown and kind of pursuing this career path. But with that, I grew up with a tech family who worked remote before remote work was really even a thing pre-COVID and all of that.

1:24So I had some exposure to like what was happening in the city 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 So I have a deep attachment to being here. So then I went to school in Utah. So farm town part two, basically. And I went to the University of Utah in Salt Lake City. And I started out in journalism. I thought I wanted to be a writer. I wrote for a couple of different publications while I was a high school student and then continued to do that throughout college. And about halfway through, I finished that degree early.

2:05and I had a very, very competitive spirit. And I was thinking about my career and thinking about how exciting it was to watch my parents' careers. And I was like, I want to pursue something in a little bit of a different field. I'm okay being an uncomfortable conversation. I'm okay learning really fast and on the fly. And I grew up around a lot of talk about money. So I was like, investing sounds like a great place to start. And so I ended up adding on another major and pursuing that. And through a string of internships and all sorts of series of events, I landed in the allocator world. So I've touched a lot of different stuff.

2:48I've been in the startup. I've been in the RAA world. I've been in, like, senior housing development, doing real estate stuff. And then obviously I had the whole journalism era beforehand, which was all mostly investigative and crime reporting. So I've really had my hand in a lot of different pools over the years, but very happy to have landed where I am now for sure. That's so cool to hear the parallels between journalism and investing. Like we are asking questions constantly and that's very similar. I've similarly, I've compared notes with friends who read scripts for a living and are producers, you know, where they're like, which of these should we help bring to life?

3:31Do you when you when you think about that journalism skill set, any advice for the rest of us on being better question askers or what can we learn from a journalist to be better investors? Well, I think, well, there's twofold. One, I think about how journalism prepared me to work in investing just in the sense of being able to understand a person sitting across from you, figure out how to ask questions on the fly. I was always pretty anti, like, script questions. I would tell myself I was going to follow one and write it out, and it never ended up going that way. And I always found that to be for the better.

4:14and I think that being in that position I'm sure you guys relate um being in that position I think teaches you really how to dig in how to follow up how to figure out what's actually important to the person sitting across from you because it's very hard to judge that before you really get the chance to talk to them so I mean being an allocator is just interviewing over and over and over again you can look at the numbers a million times and read through a deck a million times but I feel like we end up making a majority of our decisions in a large way influenced by like our conversations with people.

4:42So I think on one hand it's not being afraid to ask really pointed maybe uncomfortable questions. I think that's something that journalism taught me to be okay with, especially because in investigative and crime reporting there's oftentimes people on the other side that don't really want to be talking to you. And so you get used to asking things that are maybe provoking or are not necessarily received well, but that's just part of the job. And then on the other hand, And it's interesting now, in venture specifically from the allocator perspective, that we've kind of come full circle, where on one hand, I credit a lot of my maybe like unique edge to having a past career in journalism.

5:21But now it's almost like the other side is merging over too with the whole new media concept. Everybody has a sub stack. Everybody has a podcast. So now they're so inherently intertwined. And it's kind of, to an extent, you kind of need to know how to be a journalist a little bit. in order to be an efficient investor at all. So I don't know, in a weird way, looking back, it was kind of an accident, but I would love to say it was intentional, but I think that the two fields really do cross over a ton and are more so as time goes on. Yeah, and there's also a rich history of former journalists becoming successful venture capitalists.

5:58So it has happened. And I've always felt like my background in equity research was more of a financial journalist for a financial institution. So just learning how to find what is the true value and what's the truth is what you're trying to find in those roles. Andrew Chen, Jason Calacanis. Palmer Luckey, who founded Andrew, majored in journalism in college, which always makes me laugh. Yeah, yeah, yeah. Mike Maples. So, yeah, there's a history of that. But because you brought it up, what are some of your favorite questions to ask fund managers that you feel like really dig into that person and get you an answer that you feel like you wouldn't have got if you just asked your scripted, hey, what is your portfolio construction?

6:55Yeah, I mean, I like to dig in and get detailed if I'm talking to a team. It obviously depends on the difference between a mega, mega fund manager and an emerging manager. Because I would say, from a general overview, I spend most of my time on either end of that spectrum. And so the questions that you ask are going to be different at the end of the day. And the smaller, more emerging managers are easier to dig into because they are more eager to answer your questions. and they do have an interest in proving themselves, whereas you find kind of the opposite, right, with the big guys that if they don't want to answer something, they're not going to do it, which is just a reality.

7:31And so with smaller fund managers, I think that sourcing is really something that is easy to give a very blanket answer to. Like, yes, fantastic, you attend events, you have a good network from whatever large company you worked at prior to this. Like, that's an obvious give, but getting down even into the like, you know, what is your unique edge? How are you using media to help you? What is your IRL presence like? I think that community building has become a huge thing, but like let's go beyond that sort of buzzword and talk about what you're doing. Like pull up your calendar and let's talk about what you've done this week, last week, whatever.

8:10I'm sure also the experience as a journalist of getting background and back-channeling feel pretty much similar. Talk to us about your journalism career has prepared you for finding background, back-channeling on, hey, is it actually congruent of what you say you do in help? Does the actual market feel that way? Yeah, oh my gosh, this is my favorite topic. I did a ton, a ton, a ton of public records requesting when I was doing journalism because in crime and investigative stuff, there is a ton of information that is technically publicly available, but is behind different kinds of FOIA walls and whatnot.

8:55And that process can be a huge pain to navigate. It is not only on a federal level governed by FOIA, but then state by state, there are different laws that govern what has to be publicly released and how. So when I was living in Utah, it was the grandma system. Here, it's the Washington State Public Records system. and the way that you request information is super, super, super specific. If you mess up in your request, you can be set back a month, but there is so much information that is publicly available by law, but your actual access to it is blocked by the request process. So doing that in journalism was huge because I figured out how to navigate it, how you needed to talk to people, who you needed to get on the phone and yell at to say it's been 30 days, I need to move on to the next step in this process, like this is how this works.

9:45And so it's as simple as like there's an online portal where you can go and request different information from your government that pertains to public employers, private employers, tons of different stuff that's processed or reported on financially, tons of stuff in the tax universe that can all be really good indications about what's happening, maybe in a certain market, maybe with a certain firm. And so it serves as a good way to background check, not necessarily people individually, but like a group and what they're doing. And so learning how to navigate that process early on and being able to step in doing that has been awesome.

10:21We use FOIA to get a hold of all kinds of endowment and pension planning, investing strategies, and to see how they've changed over time because all that has to be publicly filed. That's a very cool example of why your families and clients need Rachel. Like this layer that you are providing at Lenora, it's a little bit untraditional. Do you mind explaining to those who don't know about Lenora what your platform does and where you sit? Yeah. So Lenora Capital is the private investments arm of Brighton Jones. And so Brighton Jones is a really massive RIA based here in Seattle where I'm sitting. but we've got offices all over the country, 30 billion in assets, 4 ,000 clients, think traditional private wealth management.

11:14And then over time, we've built out a very dedicated family office platform that is really separate from the rest of the wealth management business because, I mean, over the last 25 years of existing, especially being headquartered here in Seattle, as you can imagine, there was some serious, serious wealth accumulated with some of our early, early clients. So we have tons of family office clients that range from C-suite to legal to high up at public and private companies that, at the end of the day, need a completely different specialized set of planning tools. So we've developed a trust company that exists within us.

11:50We have a fantastic tax team. We have estate lawyers. It's the full nine yards. And so Family Office operates differently because at the end of the day, they have a huge amount of capital, and a lot of them have both a financial interest but also a personal interest in investing privately. As you can imagine, if you are the CEO of a massive publicly traded company, you're going to get a lot of unique opportunities to be an LP in a fund or put money towards a startup. But at the end of the day, you as a single person off of your own private balance sheet cannot operate like a fund manager when you've got a company to run.

12:24And so we built out Lenore Capital three years ago, roughly, brought in a bunch of awesome people to basically run a drawdown fund of our own that capital is committed to by these different families. So we invest in venture, we invest in real estate, we invest in private equity, we do stuff directly and through funds. So we are an LP on the venture side exclusively. Private equity deals, buyouts, and real estate will do direct deals. But venture, we like to outsource to the experts. So that's kind of how our firm operates. We bring money from our clients. We don't really have to fundraise, I think, is an important way to think about it.

13:01So we have an ongoing series of vehicles so that there's something open for people that want to re-up and recommit in order to maintain their allocation of privates. But it's not a fundraising environment, which makes it really unique. Walk me through your own personal kind of journey with understanding the asset class venture. Like, it's not something that you can just, you can read headlines and it would be stale. already. So just curious how you were able to figure out, all right, what are the right channels? What's really going on? Yeah. Well, it's interesting because I think that growing up in a tech universe, you have a very generic idea of what that means.

13:36What is a venture capitalist? What is this asset class? Obviously, the 2000s are nothing like what we're living in now. I worked at a VC-backed startup when I was in college, which was kind of a helpful introduction to what does it mean to be on the other side of this table. And that was the first time that I ever had any like personal interaction with like venture dollars and what does it mean to be beholden to investors and have things to deal with in terms of having outside capital. So that was kind of another entry point into, okay, this is super interesting. These people have such an interesting approach to investing.

14:09There is huge risk in what they're doing, but obviously huge potential reward. and then developing this whole sort of institutional platform approach is a completely different story because, I mean, we've had access to some of the most incredible managers, which has been awesome. Because when you start as an LP and you are not a massive, massive and talent-sized LP, you wonder, okay, well, some of these firms are impossible to get into. Some of them are notoriously just never going to accept new LPs that they aren't familiar with. How long is it going to take us to get access to some of these firms?

14:41and thankfully and I think in large part our huge client base that has a lot of resources to provide but also just who we work with it's been a lot easier than we thought to be able to get access to these managers which has been great and then it's allowed us to actually take a really strategic approach to okay we're not just gonna say yes because it's this brand's name but now we have this slew of brand names to be able to compare and benchmark against one another we We actually are in a really great position of choice. And so learning about venture from an LP perspective really directly is so different because I don't directly come from the tech world and my background is financial.

15:22I, it's such a different experience from being like, okay, and we invest primarily in the tech and tech associated venture universe. And so we're coming at it from a really, really, really mathematical perspective. We're coming at it beholden to investors that are on a shorter timeline. And just the allocator universe is different from the tech universe, but they're merged so closely. So I think that learning about venture from this perspective has been so different because it's kind of, it's been outside of the echo chamber of Silicon Valley is probably the best way to put it. So I think that I've had a little bit more of a practical experience kind of figuring out how we feel about the asset class, which I think has been helpful.

16:04but it's been really exciting to see kind of how it's developed and how our access has developed over the last couple of years. This benchmarking topic is fascinating one you've said you spend a lot of your time on sort of like the barbell the top tier funds as well as the emerging managers focusing on these top tier funds can you walk us through how you assess them and benchmark them against each other yeah it's incredibly challenging because you do not have a consistent flow of data at the end of the day there is very ununiform reporting that happens with these top tier managers that are just not beholden to proving themselves there's great data providers out there which we have access to and we use but when you have different fund vintages and you have different specialties you have different verticals maybe your firm operates in a different way you classify by late stage differently than the next guy.

16:57Using benchmarking is, I think, really important to understand can this firm return capital to its investors and has it been able to do it consistently? Like that's number one, obviously. And so being able to see, I mean, like at the end of the day at DPI is really, really important when we don't have a perpetual timeline. So when you think about an endowment who is just trying to keep this pool of capital growing for forever, hypothetically, we have families and real people that have goals that they want to meet at the end of the day, whether it's them or their children or whatever. So we can't be thinking about 30 years in the future and exits that are going to happen off of continuation vehicles and things like that.

17:37We have to find managers that are going to be able to generate DPI. That's incredibly important. So that's a metric that we look at a ton, obviously, and focus on. But a lot of it, I think, is very intangible in the sense of how do you benchmark somebody's media strategy against another? There's, I mean, like you could benchmark, like, you know, generated views and engagement and interaction across different social platforms, but what does that really tell you? I think a lot of the benchmarking is a little bit of a finger to the wind, and it's trying to figure out how do you compare all of the unique strategies that these top-tier venture managers employ against one another, because they're all really different.

18:15And so there's tactical benchmarking and then there is a person to person sort of subjective benchmarking that has to happen with what's everything outside of what you can put on a spreadsheet. And that's, I think, just increasingly becoming a more important part of the process of making these decisions. Now we're going to take a quick break to speak with our sponsor.

18:35Rachel Kloepfer: What's an issue you've been helping a founder client with lately? Good question. So there's a few, I'll give you kind of two that are popping up all the time. So, you know, I would say one that comes up quite a lot for me lately, interestingly enough, even though I'm not an employment lawyer, although we have a very exciting employment law group, is the kind of a disagreement or a separation of one of the founders in a company. and this has been happening earlier and earlier in the lives of companies and frankly has gotten to a point where I now tell clients that you know when they're raising their first round they say hey is it a problem that we've you know had this third co-founder that's not with us anymore and the answer is no actually this happens all the time now and I don't think that your investors are going to care particularly about the fact that a third investor is not here as long as it was handled correctly with advice of counsel negotiated appropriately our employment law group is working with me very closely.

19:38Rebecca, who's been on some of your podcasts, you know, is probably getting tired of phone calls for me. But it's a very kind of busy, potent area lately. And I've been guiding a lot of companies through that. And sometimes, you know, with a board involvement. And the other one I'll give you a real quick one is, you know, these days, AI and data is all the rage. So I am involved in so many discussions about licensing, selling, transferring data between companies, AI labs, vice versa, or AI labs and other AI labs. And, you know, all the exciting issues that come with that data privacy, you know, commercial considerations and indemnifications and so on that, you know, we get in the weeds on.

20:28Rachel Kloepfer: And you absolutely are a liaison of AI internally, I understand. In the AI era, has that changed how you're working? Absolutely. It has. It's really transformed the way I'm working in the kind of minutiae of day to day. So, you know, I tell my clients when I, you know, theoretically boot up my computer every morning although I never turn it off the two things the two apps that I open immediately are my Outlook and then ChatGPT um I now by the way you know we kind of go back and forth Claude ChatGPT and other tools so we're not you know um we're agnostic to the tools whichever one's better but the idea is that you know from from the first minute that I log in um it is there as you know an assistant to what I do.

21:18It is empowering me. I am able to do what used to take, you know, five billable hours in maybe five minutes now. It is absolutely incredible. So I'm able to do more work that way. At the same time, you know, it has not taken away any of what I think is my value add, which is the experience, the human touch, the practicality, and being able to guide a client through a very sophisticated, you know, transaction, you know, negotiation, and so on. What is taken away is, hey, you know, I go to a board meeting now. I have an agent that drafts my board minutes. I can send those right after the board meeting.

22:01I don't need to ask an associate. I don't need to worry about the time that it takes them. I don't need to worry about writing off that time on the bill. And so all of that stuff, frankly, you know, and this is the interesting part that we hear from clients is they say, well, you know, you guys have all this AI and how come, you know, your profits are still so, so healthy in the legal industry. And the answer is because we can actually do a lot more, but on an individual basis, we're able to do things quicker and more efficiently. And we see that and we are, you know, working hard to communicate to clients so they can see the, the kind of cost savings pass on to them.

22:36Rachel Kloepfer: Yeah. You're getting Mike Plus. And now back to our LP interview. I was curious on how do you assess talent in the two different kind of barbells, right? Size of the barbell, right? From when you're at a large firm, it seems like you're more like a NFL team and you have this big brand and it's moving. And then when you're an emerging manager, you're more of a tennis pro where you're just individual going to these tournaments and that's just on your merits. How do you, in your mind, how are you able to assess talent in those two different arenas? Yeah, I love the NSL Tennis Pro comparison. I think that's such a perfect way to put it.

23:22It's obviously completely different. At the end of the day, the big brands can win talent because who doesn't want that name on their cap table sort of concept, which I think is ever present. I do think that there is still really important relationship building that happens there in the sense that some founders are going to pick a firm to be on their cap table because of the brand. Some people have a really close relationship with a particular partner. So I think that both of those things can be true when it comes to a household name that everybody recognizes. Maybe you're going with them because they have fantastic resources and you want that brand association.

23:56Sometimes you're going with them because you have a relationship with a particular partner that you really trust, you really want to be part of your team. And those two things can be true at the same time. On the smaller end, I think that you're pretty much entirely relying on the latter, which is that when the brand necessarily doesn't hold significant weight, you are picking the firm because of the person and you are picking the firm because of the partner that you want to work with. And so assessing that talent is all about who is this person's network, where do they come from? If they're starting a new fund, maybe they're in that sub$150 million range.

24:31It's like, why you as a GP? Where do you come from? Is it because you have an incredible network through a large tech company that you worked at? Is it because you've started something of your own and it was really successful, and so you have great relationships with follow-on investors? Is it because of your academic background and the way that you're still heavily involved as an alumni? And I think that from the founder perspective and the LP perspective, you're going to look at that person really differently and say, this has to fall on you because without a brand that is immediately recognizable, you as the individual are the super connector.

25:02You're the person that's helping us with distribution. You're the person that's helping us grow. You're the person that's going to help us bring really excellent follow on capital onto this if you can't provide it. So the talent part is so much more personal, I think, when it comes to a smaller general partner than it is when it comes to the really, really big guys. It doesn't mean it's not important on that end of the spectrum as well, but assessing talent is way more individual. And they can have all of those great things like a newsletter, like a media presence. But at the end of the day, it's all focused on them and they are the center of that universe.

25:37You mentioned that there are firms that you would have been surprised to say no to a few years ago or the reverse is true. And without naming names, I'm curious, what's changed your mind in some cases about some of these brand name managers? Yeah, I think something huge that has developed a lot in the last couple of years is the idea of a real lack of succession planning. When it comes to some of these major firms, especially if you have incredible partners that do attract a lot of people because they've built. If you're a Midas-less investor that is an ideal person for people to work with and your network is a core piece of the business, especially if the firm is 20, 30 years old and you've been building it from day one, the day that you're not there anymore, there is going to be a difference because the brand does do a lot of the pulling, obviously.

26:32But there is that relationship piece that still does exist with the mega funds because you can't have one over the other completely. You really need to develop both and maintain both. And so I think that it can be a little bit concerning sometimes to see, okay, well, you have this incredible track record. You're doing great. You're raising the biggest fund you've ever had. It's 10 years with, God knows, five, six, seven, one-year extension periods. We're looking at a 20-year relationship probably at the end of the day if we continue to re-up. And so if your general partners aren't going to be there anymore, if they want to retire or they're just getting really old that they can't participate anymore, you're losing pull or you're losing access to maybe a specific pool of people that's done you really well.

27:14So if you have, let's say a GP who was a huge higher up at Google, this is a completely random example, and you've been pulling in deep mind founders and you've been attracting the talent that's come out of that company and you were a senior there and people really respect your relationship with that sub-purpose founders and then you're no longer there, maybe you lose your tie to that pool of founders and then they're going to go to somebody else that has the same sort of a point of similarity or that they can bond over that with. And so I think the best way to mitigate that is to really, really promote from within and build up your junior and like principal level investors and help them brand as the firm grows.

27:53But I think that there's been a little bit of lack of investment in that because there's so much focus on the media presence of the firm and the brand itself, which I think is great, I think is super important. But as time goes on and some of your older people start to retire or or move away and then I don't recognize a single name on a deck anymore, it's kind of like I really wonder what a founder is going to think when there's no longer this presence of iconic, iconic names that have meant a lot to the firm's history. So I think that's been a reason why we've said no to a couple of opportunities that out of first touch, I would have been like, this is one of the best firms I can possibly think of.

28:30I'm obviously going to say yes. But when they don't really have a really strong succession plan and there is really an indication of that being a focus in the near future. When you're thinking about building a multi-decade relationship, it just starts to become a point of concern because there are firms that are doing a really great job at that and are pouring a lot into helping to build up their team and make sure that that track is going to stay active and that there is a brand associated not only with them, but their people. You mentioned it earlier about how dynamic the market is today. We've never seen something like this ever And it actually makes the SaaS era seem pretty archaic in comparison, right?

29:09Like I was having this epiphany the other day of like, how different was my job in 2017 than 2007? And then how much was my work different in 2007 than 1987, someone doing it? It wasn't. And now things are rapidly changing. People are looking for different things. you can at your fingertips build any size product you want. Not that you should, but you can. And so if all that is changing on the ground for founders and then at the passenger seat for the VCs, how does an allocator stay up to date on like what's going on to iterate their own point of view? Well, I think that that is a really important part of the strategy that we employ or just sort of the thesis that we have around what kind of GPs do we want to work with?

30:02Because I think at the end of the day, I mean, you've heard it a million times that distribution is going to be the only mode if you're building some sort of SaaS or consumer product at this point. Obviously, it's different if you're talking about hardware or some sort of really specialized industry. That's obviously like a new topic that's a whole different conversation. But at the end of the day, if we're going to look for a team that we can trust to build like SaaS products or consumer-facing products, you need to be with a big fund, in my personal opinion. That is the moat. Everybody knows that.

30:32The opposite is completely true, where I kind of feel like the real strength for a smaller GP is a really, really niche specific knowledge around maybe a highly regulated industry or a really complicated one. I think that you see life sciences and bio, you see hardware, you see anything that relates to selling to the government, you see anything that's tied to blue collar logistics. I think that smaller GPs can have a really strong pull in that universe if they've got a really niche knowledge. Because they don't necessarily have to build an insane moat if their product just is that, and they have the understanding to be able to deploy to the right places.

31:11So with how fast everything is changing, I think that the trust that you have to have this NLP is that we can't predict the future and none of these GPs can either. At the end of the day, no one knows what's going to happen tomorrow. There is no all seeing eye that's going to have the right answers. And so if you're making a bet in a riskier area or an area that you feel like is more unstable or potentially changing faster, that's where I feel like it's better to offload that responsibility to people that have so much manpower and brand power that they can will their way through it. Rachel, you are this incredible dedicated resource for like Lenora Capital clients who is deep in venture.

31:52You're talking to the biggest names. You're talking to the hottest new emerging managers. What is the thing that your clients are also, in some cases, the people running Seattle? what what is the thing that that like where are people better off making their direct investments i know you're coaching your clients constantly on their own sort of like individual access deals angel deals they're getting pitched gp pitches as well our audience are looking to allocate into this industry and they have some access they also are maybe considering like a fund of funds or going into a pool vehicle like yours at a high level where do you see like needing a middleman and where you can kind of do it yourself like there's so much interest in doing direct deals what's your sort of coaching of your clients on what percentage of their capital should be going into your dedicated pots versus the things that they are getting pitched uh you know through friends yeah that's a huge part of my job that's completely separate from being like an investor myself and is like a pure coaching experience which is very unique to have such an impressive set of people sends you an email and be like, hey, what do you think of this?

33:30Does this make sense for me? And so it's different, right? It's very much based on the size of the client. There are some clients that are so large that at the end of the day, it's important to frame something as like a financial investment versus a passion investment. I think that the fund vehicle that we've created is a financial tool. It would take a lot of capital and a lot of time and a lot of dedicated research to build this portfolio because it's not only a venture, it's real estate, it's private equity, it's doing direct buyouts, it's buying apartment buildings and senior housing, and it's helping to run those things.

34:04As an individual person, even if you're the CEO of a company, you don't have the time to do that and do it to the best of your ability. It makes sense to outsource that if you want a diversified allocation of the private markets. That's where a fee is worth it because you are not going to be able to build that same portfolio on your own time. and even if you like wanted to pay your own individual team to do so and you wanted a completely solo family office that is another huge amount of capital so I really think that in a lot of cases if you're interested in general private markets exposure and you understand why you want to be invested in the private markets it makes sense to do a fund-to-fund sort of structure like what we're doing or what somebody else is doing because it takes so much lift off of you and you have a huge set of resources if you're doing that so you're paying that fee for a reason at the end of the day which is to employ a whole group of people to go and take care of this investing process for you it's totally different if you have a passion area that you want to be involved in if you've got a specific area that you know a lot about i think we kind of see twofold of this in the venture space one is hey i have access to this direct deal it's this round, these are the terms, what should I do?

35:17That question is usually way more one of, well, how did you get this opportunity? Who brought this to you? Do you feel like you wanna be involved with this person? Do you want insight or access just to have like an observer see on what's going on? Are you just really excited about it? Like, let's drill down onto why you wanna do this opportunity. I have one last question for you, Rachel, while I have you here. is look through your, you know, look through the future. And I want you to give us a prediction on where do you see the media wars going? What is the, like, in venture? Like, is it something that we just forget?

36:01Is it something that's going to be lasting? Just what do you think this whole kind of, like, media wars? Yeah. Well, I have a unique lens into this. My sister works in commercial production and she has worked with a couple of awesome startups. And that's a universe that I don't really touch at all. So I get to see another side of what does it look like to produce a lot of this content and how much money is going into it. Not only on behalf of venture teams themselves, but like underlying portfolio companies. I think it's going to be everything. It's the streaming wars. It's the entertainmentification of the entire economy.

36:38We talk a lot about how perhaps even one day we're going to see talent looking a lot more like sports talent in tech than it does currently, where you have maybe even an agent that's helping to negotiate offers between different massive companies. And I see that the kind of circle meeting at the top, again, like we talked about earlier, is going to come true with entertainment and with venture. It's how you get eyes on your portfolio companies. It's not only how you get customers, but it's how you get talent and it's how you retain talent. And I think that that is so, so, so difficult to do. And having talent retention, not only as a startup with your underlying portfolio companies, but also as a general partner is completely make or break to your ability to succeed.

37:26And so having those eyes on you, it brings you more money. It brings you more LPs. It brings you better founders. It wins you deals at more disciplined prices. It helps you attract better talents to make those investment decisions. It helps you attract better talent for your underlying portfolio companies. Because at the end of the day, people like eyeballs on them if they've got ambitious goals. And that is what's going to win. I think that we're going to continue to see podcasts, Substack, YouTube. I think about like startup launch videos that have become so popular. I think that's going to become even more extreme.

38:00You think about iconic movies that have to do with the tech scene that have like stood up over time. Like the social network is not a blast of its kind. I wouldn't be surprised before we see some sort of like A16Z documentary gets dropped. And so I think that the media wars are going to continue to be a huge, huge, huge, if not increasingly larger part of what makes a firm attractive and what keeps them around. And I think as things get really, really volatile, the ability to control your own narrative is so, so important. And if you have a ton of owned media channels, you can do that. and you can stand on the ground of your thesis and you can stand on the ground of what you're doing.

38:37And if you have people listening to you and not listening to a news outlet writing something about you or about your industry, that's everything. So I think it's not just media, but it's owned media. It's media that you have control over and people are looking to you first to hear about what you're doing rather than looking elsewhere. I think it's gonna be make or break. So I'm very excited about that. I think it's a completely new turn for the industry and we're sort of at the beginning of it. And so I'm very curious to see how that changes over time. Thanks so much, Rachel. That's awesome. Of course.

39:09Thanks, Rachel. So nice to talk to you guys.

39:13Rachel Kloepfer: See you later, Allocator. After Portfolio Tile, investing with a smile.