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.

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