Why Venture’s Best Opportunities Are Moving to the Edges

Why Venture’s Best Opportunities Are Moving to the Edges

This week on Swimming with Allocators, Kate Simpson joins Earnest and Alexa to share her journey from starting as a history major at the UNC endowment to leading the venture strategy at multi-asset OCIO firm GEM. She explains how she learned institutional investing, specialized in private markets, and refined her craft at Parish Capital and Truebridge, including fund-of-funds due diligence, reference work, and the power of platforms and networks. The conversation dives into how to build a venture program from scratch, why alignment, patience, and resource intensity matter, and how GEM uses a barbell approach across top-tier scaled platforms and emerging managers while avoiding the “crowded middle.” Kate breaks down how LPs evaluate managers (source, pick, win), why fund math and ownership are critical, and how today’s AI-driven cycle, secondary markets, and companies staying private longer are reshaping ventures. Also, don’t miss Nick Cassin from Sidley as he explains the rapid growth of the private-fund secondary market, what’s driving the surge in secondary and continuation vehicle (CV) transactions, and how new types of capital providers are stepping in as lead investors to provide liquidity to private-market participants. Highlights from this week’s conversation include: * Starting at UNC Endowment With No Finance Background (0:31)   * Transitioning from TrueBridge to Gem and Taking on a Leadership Role (6:10) * Advice for Building a New Venture Program and Aligning Stakeholders (10:12) * Democratization of Venture Access and Barbell Strategy for Manager Selection (12:38) * Sourcing and Evaluating New Venture Managers with a High-Volume Funnel (16:26) * Secondaries Market Boom and Macro Dynamics Driving Liquidity Needs (21:00) * Rise of Continuation Vehicles and Structural Evolution of Secondaries (23:36) * How to Approach a First LP Meeting and Importance of Fund Math (26:03) * Defining Early Versus Later Stages and Gem's Seed and Micro Fund Threshold (28:13) * Normalization of Secondary Liquidity for Founders and Early Investors (35:24) * Future Opportunities in Smaller Funds and the Dynamic Early Ecosystem (36:12) * Final Thoughts and Takeaways (40:12) GEM is an independent investment management firm that provides customized solutions for long-term investors worldwide. Since 2007, we have sought to deliver superior risk-adjusted returns to our clients by combining disciplined investment research and active portfolio management with exceptional service and enduring partnership. With a global platform, broad institutional investment capabilities, and an experienced team, we design portfolios to meet the unique needs of each investor we serve. For more information, visit www.geminvestments.com. Sidley Austin LLP is a premier global law firm with a dedicated Venture Funds practice, advising top venture capital firms, institutional investors, and private equity sponsors on fund formation, investment structuring, and regulatory compliance. With deep expertise across private markets, Sidley provides strategic legal counsel to help funds scale effectively. Learn more at https://www.sidley.com/sidley.com [http://sidley.com]. Swimming with Allocators [https://swimmingwithallocators.com/] is a podcast that dives into the intriguing world of Venture Capital from an LP (Limited Partner) perspective. Hosts Alexa Binns and Earnest Sweat are seasoned professionals who have donned various hats in the VC ecosystem. Each episode, we explore where the future opportunities lie in the VC landscape with insights from top LPs on their investment strategies and industry experts shedding light on emerging trends and technologies.  The information provided on this podcast does not, and is not intended to, constitute legal advice; instead, all information, content, and materials available on this podcast are for general informational purposes only. Learn more about your ad choices. Visit megaphone.fm/adchoices [https://megaphone.fm/adchoices]

DDQ: Celebrating 100 Episodes with Swimming with Allocators

In this 100th episode of Swimming with Alligators, Earnest and Alexa dive into how emerging managers and VCs can truly differentiate in a world where everyone shows the same logos and track records. They unpack why LPs increasingly care about who actually sourced and led deals, why personal differentiation matters more than over-explaining strategy, and how consumer investing is quietly coming back into favor. They explore the limits of “AI strategies” that are more theater than edge, the shifting career paths for 30–40-something VCs, and whether the popular barbell approach to venture (tiny funds + megafunds) still fits a rapidly changing market. They also discuss how diligence is evolving, why moats now look more like trust, data, and distribution than pure tech, and what a wave of large IPOs could mean for angels, new funds, and early-stage competition. Highlights from this week’s conversation include: * Celebrating 100 Episodes and DDQ Format (0:33)   * Differentiation in Fund Decks and Shared Logo Problem (2:12) * Why Sourced vs Led Matters and Back-Channel Relationships (3:56) * Overemphasis on Strategy vs True Differentiation and Team Cohesion (6:25) * Pressure to Go Public, Headaches of Being Public, and Lawsuit Risk (10:14) * OpenAI, Anthropic, SpaceX, and Logic of If They Do It, We Have to Do It (12:26) * Enterprise VCs Moving into Consumer and Founders Rethinking Moats (14:11) * Distribution, Brand, Trust, and Proprietary Data as Defensible Moats (16:25) * Google, Personal Data, and Unseen Costs of Using LLMs (18:15) * LPs Asking About AI Strategy and Congruent Use of AI Tools (20:44) * Start ,Bench, Cut, Trade, and Suspend for 30s and 40s VCs (24:46) * Allocators Following a Barbell Approach and Conventional Wisdom (27:11) * LPs Diligencing Firm Strategy, Hiring, and Seed Creep at Large Funds (34:56) * Audience Q&A Segment Introduction and Contact Information (37:13) * Tinkering, Experimenting with Workflows, and Evaluating AI Tool Impact (39:07) * Durability of Business Models, Trust, Distribution, and Manufactured Momentum (41:02) * Post-IPO Talent Leaving, Mafias, and Angel-Backed New Founders (44:11) * Closing Reflections on 100 Episodes and Looking Ahead to the Future (46:24) Swimming with Allocators [https://swimmingwithallocators.com/] is a podcast that dives into the intriguing world of Venture Capital from an LP (Limited Partner) perspective. Hosts Alexa Binns and Earnest Sweat are seasoned professionals who have donned various hats in the VC ecosystem. Each episode, we explore where the future opportunities lie in the VC landscape with insights from top LPs on their investment strategies and industry experts shedding light on emerging trends and technologies.  The information provided on this podcast does not, and is not intended to, constitute legal advice; instead, all information, content, and materials available on this podcast are for general informational purposes only. Learn more about your ad choices. Visit megaphone.fm/adchoices [https://megaphone.fm/adchoices]

Cultivating a Venture Program Without Chasing the Hype

This week on Swimming with Allocators, Earnest and Alexa welcome Mike Kakenmaster, Director of Investments at Loyola University Chicago, to discuss how a small endowment builds and scales a modern private capital and venture program. Mike shares his journey from hedge funds and a family office to Loyola, explaining how being a generalist across asset classes (hedge funds, buyout, credit, venture) helps him see risks, opportunities, and market cycles more clearly. The conversation covers the shift of LP attention between private markets and hedge funds, how Loyola doubled its private capital allocation, and why they moved deliberately into venture instead of rushing into brand-name funds. Mike also explains why early-stage track records can be misleading, how he evaluates managers (portfolio construction, reserves, access, networks, and founder/company quality), and why smaller and emerging managers can be especially compelling. Also, Chuck Daly of Sidley focuses on how first-time fund managers should thoughtfully build their operational and governance infrastructure, especially around disclosures and conflicts of interest, so they can run a real business, protect LPs, and clearly communicate how they’ll handle inevitable issues. Highlights from this week’s conversation include: * From Hedge Funds And Family Office To Loyola Investment Office (0:30) * What Keeps Mike Interested in Allocating and Fund Investments (3:14) * Advantages of Being a Generalist Across Multiple Asset Classes (5:42) * Shift of Capital Between Private Markets and Hedge Funds (10:30) * Growing Loyola’s Private Capital Allocation and Building from Scratch (13:22) * Early Days Entering Venture During a Hot Fundraising Environment (16:51) * Operational Infrastructure, Disclosures, and Conflicts Framework for GPs (19:20) * Governance Framework and Handling Unforeseen Conflicts of Interest (22:40) * Avoiding Overreliance on Early Venture Track Records and Marks (27:53) * Evaluating Reserves, Follow-On Decisions, and Portfolio Construction (32:14) * Loyola’s Venture Strategy, Emerging Managers, and Fund Size Sweet Spot (34:34) * Advantages of Partnering with Smaller Endowments for GPs (39:16) * Advice to Smaller Endowments Starting a Venture Program (43:20) * Final Thoughts and Takeaways (46:21) Founded in 1870, Loyola University Chicago is one of the nation’s largest Jesuit, Catholic universities, with nearly 17,000 students. The University has four campuses: three in the greater Chicago area and one in Rome, Italy, as well as course locations at our Retreat and Ecology Campus in Woodstock, Illinois. The University features 13 schools and colleges, including the Quinlan School of Business, Marcella Niehoff School of Nursing, Stritch School of Medicine, Parkinson School of Health Sciences and Public Health, Arrupe College, College of Arts and Sciences, School of Communication, School of Continuing and Professional Studies, School of Education, School of Environmental Sustainability, School of Law, School of Social Work, and Graduate School. Consistently ranked a top national university by U.S. News & World Report, Loyola is also among a select group of universities recognized for community service and engagement by prestigious national organizations like the Carnegie Foundation and the Corporation for National and Community Service. Sidley Austin LLP is a premier global law firm with a dedicated Venture Funds practice, advising top venture capital firms, institutional investors, and private equity sponsors on fund formation, investment structuring, and regulatory compliance. With deep expertise across private markets, Sidley provides strategic legal counsel to help funds scale effectively. Learn more at https://www.sidley.com/sidley.com [http://sidley.com]. Swimming with Allocators [https://swimmingwithallocators.com/] is a podcast that dives into the intriguing world of Venture Capital from an LP (Limited Partner) perspective. Hosts Alexa Binns and Earnest Sweat are seasoned professionals who have donned various hats in the VC ecosystem. Each episode, we explore where the future opportunities lie in the VC landscape with insights from top LPs on their investment strategies and industry experts shedding light on emerging trends and technologies.  The information provided on this podcast does not, and is not intended to, constitute legal advice; instead, all information, content, and materials available on this podcast are for general informational purposes only. Learn more about your ad choices. Visit megaphone.fm/adchoices [https://megaphone.fm/adchoices]

What It Takes to Win With Institutional LPs

This week on Swimming with Allocators, growth-investor-turned-LP Yuri Lee (TMRS) joins Earnest and Alexa and explains how her global upbringing and love of technology shaped her investing philosophy and belief that talent can come from anywhere. She walks through TMRS’s $3B and growing venture/growth mandate, how they split exposure between early-stage and multi-stage funds, and why they are building an aggressive 50/50 funds and co-investment program. Yuri shares what she looks for in emerging managers in clear, differentiated edge in sourcing, picking, or winning; true product–market fit between a manager’s edge and fund strategy; and non-consensus, outlier ideas. Throughout, she offers candid advice on how GPs can better pitch institutional LPs, why most decks sound the same, and what it really takes to stand out in a consensus-heavy, AI-dominated market. Also, Chuck Daly of Sidley talks about how emerging VC managers should think proactively about compliance, conflicts of interest, disclosure, and performance/marketing practices under (and aligned with) the Advisers Act and SEC’s marketing rule principles. Highlights from this week’s conversation include: * How a Global Upbringing Shapes an Investor’s Worldview (0:13) * Consumer Investing and Game Development Experience (2:22) * Market Cycles in SaaS and Consumer Narratives (4:19) * TMRS Mandate and Building a New Venture Program (6:16) * Early Stage Managers and Differentiated, Non-Consensus Portfolios (9:20) * What Matters Most at Early Stage vs Growth Stage (12:08) * What LPs Really Want to Hear About: Companies and Decisions (14:11) * How Pensions and Institutional LPs Run Diligence (17:04) * Managing Portfolio Company Synergies and Conflicts (23:56) * Marketing Rule Principles, Performance, and Case Studies (26:21) * Why TMRS Uses Co-Invests and Target Mix With Funds (30:15) * Barbell Approach: Early Stage Funds and Later Stage Co Invests (32:02) * Information Gaps for LPs vs GPs and Founder Access (35:55) * Consensus Rounds, Party Rounds, and Manager Profiles (38:56) * Role of Non-Consensus Managers and Unique Edges (42:09) * Rethinking AI Thesis and Value Capture by Model Labs (43:22) * Advice For GPs Moving to LP Roles and Building Empathy (45:20) * Final Thoughts and Takeaways (47:18) The Texas Municipal Retirement System is a $48+ billion public pension plan serving employees of participating Texas cities. TMRS invests across a diversified portfolio including public equities, fixed income, real assets, and private equity, with venture and growth investments forming an important component of its private markets strategy. Sidley Austin LLP is a premier global law firm with a dedicated Venture Funds practice, advising top venture capital firms, institutional investors, and private equity sponsors on fund formation, investment structuring, and regulatory compliance. With deep expertise across private markets, Sidley provides strategic legal counsel to help funds scale effectively. Learn more at sidley.com [https://www.sidley.com/]. Swimming with Allocators [https://swimmingwithallocators.com/] is a podcast that dives into the intriguing world of Venture Capital from an LP (Limited Partner) perspective. Hosts Alexa Binns and Earnest Sweat are seasoned professionals who have donned various hats in the VC ecosystem. Each episode, we explore where the future opportunities lie in the VC landscape with insights from top LPs on their investment strategies and industry experts shedding light on emerging trends and technologies.  The information provided on this podcast does not, and is not intended to, constitute legal advice; instead, all information, content, and materials available on this podcast are for general informational purposes only. Learn more about your ad choices. Visit megaphone.fm/adchoices [https://megaphone.fm/adchoices]

How Denmark Built a Big-Tech Future From a Small-Country Base

This week on Swimming with Allocators, Erik Balck Sørensen joins Earnest and Alexa to share his journey from serial founder in an almost non-existent Danish startup scene to CIO of Denmark’s Export and Investment Fund, a sovereign platform backing innovation at scale. Erik explains how Denmark went from having no venture funds or ecosystem infrastructure to becoming a global player in biotech, green tech, and deep tech, and why “giving back” and tight founder communities were crucial to that evolution. He breaks down what it really means to run a sovereign wealth fund with a dual mandate, balancing financial returns for taxpayers with societal impact, and how political momentum, past missteps, and investment discipline shape their strategy. Erik also details Denmark’s 2030 plan: moving faster, professionalizing as an LP and direct investor, and doubling or tripling down on stronghold verticals like life sciences, selected green technologies, quantum computing, and European growth-stage capital. Additionally, Chuck Daly explains how evolving market dynamics, LP demands, and longer-dated, more complex venture products are reshaping the regulatory landscape for VC managers, driving greater scrutiny on valuation, fund structures, and exemptions, and highlighting the value of Sidley’s deep, shared institutional expertise for GPs navigating this shift. Highlights from this week’s conversation include: * Erik’s Journey From Founder to Sovereign Wealth CIO (0:13) * Community Building and Giving Back Culture (5:26)   * Corporates, Biotech, Green Tech, and Deep Tech (8:17)   * What Denmark’s Export and Investment Fund Is (9:39)   * Balancing Political Momentum, Purpose, and Profit (12:52)   * Small Country Strategy and Global Fund Partnerships (15:51)   * 2030 Strategy to Move Faster and Smarter (19:42)   * Priority Verticals: Biotech, Quantum, Green Tech, Growth (32:08)   * Misconceptions About the Fund and New Operating Style (36:58)   * Infrastructure Bets: AI Supercomputer and Quantum Facility (40:48)   * Technological Sovereignty and Europe’s Tech Dependence (44:14)   * Defense Technology Catch-Up with US Partners (48:47)   * Optimism From Founders and How to Contact Erik (51:01)   Denmark´s Export and Investment Fund is a new, state-owned fund which proves a single point of contact to all Danish companies in need of state financed risk capital. We cover both the entrepreneur, small and medium-sized companies who need capital to unfold their full potential, and export companies who wish to conquer new or emerging markets. We can guide you all the way, from the company´s tentative beginnings through substantial growth to entry into the global markets with export guarantees and stock market listings, because our mission is to help to grow the Danish economy and green the globe. http://www.eifo.dk [http://www.eifo.dk] Sidley Austin LLP is a premier global law firm with a dedicated Venture Funds practice, advising top venture capital firms, institutional investors, and private equity sponsors on fund formation, investment structuring, and regulatory compliance. With deep expertise across private markets, Sidley provides strategic legal counsel to help funds scale effectively. Learn more at sidley.com [https://www.sidley.com/]. Swimming with Allocators [https://swimmingwithallocators.com/] is a podcast that dives into the intriguing world of Venture Capital from an LP (Limited Partner) perspective. Hosts Alexa Binns and Earnest Sweat are seasoned professionals who have donned various hats in the VC ecosystem. Each episode, we explore where the future opportunities lie in the VC landscape with insights from top LPs on their investment strategies and industry experts shedding light on emerging trends and technologies.  The information provided on this podcast does not, and is not intended to, constitute legal advice; instead, all information, content, and materials available on this podcast are for general informational purposes only. Learn more about your ad choices. Visit megaphone.fm/adchoices [https://megaphone.fm/adchoices]