What exactly are LPs buying when they allocate to venture today and do they still believe in it?
In this episode, Andreas sits down with Max Bray and Juliet Bailin, both Venture Partners at Kindred Capital VC to unpack what’s really happening beneath the fundraising headlines.
Max brings the raw perspective of trying to raise a first-time fund in 2025 with unicorn-founder GPs, strong angel track records, and still struggling to secure second meetings.
Juliet brings the sharper counterpoint: LP frustration isn’t always ignorance. Sometimes it’s a rational response to how venture has been practiced, especially around transparency, liquidity discipline, and the unrealistic expectation that a GP should be world-class at everything.
This is a conversation about:
LP behavior in uncertain cycles
The myth of the “full-stack investor”
Why solo GP economics are brutal
Whether software still needs venture
And why the fund model is splitting at the extremes
Not hot takes. Not doom.
Just honest mechanics.
What’s covered:
01:04 Max’s 2025 fundraising reality: even strong “on-paper” stories struggle to get second calls
03:46 LP rotation: capital moving toward liquidity, security, and shorter-duration bets
05:08 LP frustration: transparency gaps + liquidity decision-making
07:09 LPACs as sparring partners, not governance theatre
09:31 Europe’s structural issue: too few LPs and GPs have lived full cycles
12:47 The “full-stack investor” myth: investing + fund management + compliance + IR
14:46 Solo GP economics: why 2/20 breaks at the small end
26:08 The barbell thesis: platforms on one end, specialists on the other
27:56 Software defensibility compression in the AI era
30:24 Will AI decentralize outcomes or centralize them further?
33:10 The rise of AI roll-ups and alternative capital models
35:19 The “middle-market squeeze” — real or overhyped?
39:34 What founders actually care about when choosing a fund
🎧 Listen on Apple or Spotify and if you’re raising, investing, or building a fund, this one is worth sitting with.
LP Conviction: The Real Problem Isn’t Belief
Max’s experience fundraising through 2025 revealed something deeper than “tough market vibes.”
Even strong founding teams with unicorn-building operators and meaningful angel track records struggled to get traction.
Why?
Because in uncertain macro conditions, early-stage venture looks like:
The longest-duration asset
The least liquid
The hardest to underwrite
And many LPs — especially non-dedicated ones — simply rotate toward liquidity.
Public markets. Bonds. Secondaries. Later-stage.
Not because venture “doesn’t work.”
But because venture tests patience more than most capital pools are structured to tolerate.
LP Frustration Is Sometimes Rational
Juliet pushes back on the easy narrative that LPs just “don’t get it.”
Two recurring pain points:
1️⃣ Transparency
LPs often lack real visibility into:
How deals are sourced
Why are specific pricing decisions made
Who is driving conviction internally
How portfolio construction decisions evolve over time
2️⃣ Liquidity Discipline
Many GPs are trained to:
Pick founders
Win deals
Support companies
Fewer are trained to:
Manage reserves intentionally
Optimize DPI
Think structurally about liquidity windows
Avoid hype-cycle overexposure
That gap creates friction.
Not because venture doesn’t work.
But because execution quality varies widely.
The Full-Stack Investor Myth
One of the most important insights in the episode:
We expect VCs to be exceptional at:
Founder selection
Portfolio construction
Governance
Fund structuring
Compliance
Tax
Investor relations
Fundraising
Liquidity management
That’s not a role. That’s multiple careers in one.
Juliet’s argument is clear: we’ve overloaded the GP model. The industry may need to evolve toward systems and structures that allow investors to specialize, rather than forcing everyone to be an octopus.
Solo GPs: Beautiful Model, Brutal Economics
The romantic narrative of solo GPs masks a hard reality:
On smaller funds, 2/20 doesn’t work cleanly.
After:
Legal costs
Fund admin
Compliance
Travel
Portfolio support
GP commit
There isn’t much left.
Many solo GPs are effectively:
Betting on carry
Absorbing personal financial risk
Operating at extreme efficiency
Some are adjusting to 2.5% or blended fee models.
LPs are often more flexible here than expected.
But the structural tension remains.
The Barbell: Where Venture Is Headed
Max’s thesis: The industry will likely shrink in number of funds, but not necessarily in AUM.
Why? Because capital is concentrating into:
Large Platforms
Brand dominance
Check size flexibility
Global distribution
Faster deployment
Lower price sensitivity
Focused Specialists
Domain depth
Taste
Concentrated portfolios
Clear positioning
High-conviction capital
And the middle? The middle doesn’t die, but it must justify itself.
Founders are asking:
“Why you?”
Not “nice deck.”
Not “good vibes.”
But a clear, credible reason why working with this fund increases their probability of success.
Does Software Still Need Venture?
AI is compressing the cost of building software.
If defensibility weakens, do we see:
More seed-strapped companies?
More smaller outcomes?
Fewer unicorn trajectories?
Or…
Does AI actually accelerate centralization?
Andreas argues the latter may be more plausible.
Even if building is easier:
Distribution still matters
Network effects still matter
Category leadership still matters
The mechanism may change. The power law might not.
The Quiet Shift: Alternative Capital Models
Another emerging thread:
If venture doesn’t perfectly fit every opportunity, we’ll see:
AI roll-ups
Search-fund-style strategies
Blended debt-equity structures
Capital models tailored to real-world assets
Venture was applied broadly over the last decade.
The next decade may be about matching capital structures more precisely to business reality.
Final Thought
Venture isn’t collapsing, but tolerance for fuzzy positioning is.
LPs want clarity on outcomes.
Founders want probability of success.
The middle must justify itself.
And the industry is being forced to mature.
This isn’t doom. It’s selection.
