E251: Why 95% of Funds Don’t Pass LP Diligence w/Alex Edelson

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Nov 28, 2025

In this engaging discussion, Alex Edelson, Founder of Slipstream and former leader at QED Investors, unveils the secrets behind LP diligence and the challenges emerging managers face. He emphasizes how AI is transforming sourcing and research, and why a staggering 95% of funds are screened out before even getting references. Alex shares insights on building trust with GPs, the importance of 'real talk references,' and how deep tech requires unique strategies. This conversation is a treasure trove for understanding modern venture funding and building lasting partnerships.

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INSIGHT

AI Is Becoming Ubiquitous In Seed VC

Seed funds widely adopt AI for sourcing, diligence, operations, and memos to boost efficiency.
Alex Edelson expects AI to increasingly power venture workflows though relationships remain core.

ADVICE

Be A Constructive, Value-Adding LP

Help GPs by constructively pushing on strategy and building the best version of their fund.
Be a responsive, transparent thought partner and earn trust early in the process.

INSIGHT

Ownership Versus Shots On Goal

High ownership relative to fund size remains valuable, but deep tech may justify more shots with slightly lower ownership.
Edelson favors ~25–35 company portfolios for better diversification in certain sectors.

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What does it actually take for an emerging manager to convince a top LP to invest? In this episode, I’m joined by Alex Edelson, Founder of Slipstream, and one of the most respected LPs backing elite seed funds today. Alex pulls back the curtain on how LPs use AI, what “real talk” references look like, how he evaluates GPs, and why only a tiny percentage of funds ever make it through his screening. We also dive into portfolio construction, picking and winning founders, why deep tech requires more shots on goal, and how Alex builds long-term trust with the world’s top institutions. This conversation is a masterclass in LP underwriting and what separates good managers from truly exceptional ones

Highlights:

How top seed funds use AI for sourcing, diligence, and market research.
Why underwriting venture still comes down to relationships, brand, and founder trust.
Why Slipstream screens out ~95% of funds before doing references.
What “real talk references” reveal that most LPs never hear.
Why deep tech sometimes needs more shots on goal with slightly lower ownership.
How Alex developed his “right to win” as an LP after QED.
What GPs misunderstand about the bar for raising today.
How anti-selling helps LPs filter for long-term partners.
Why LP relationships often become deep personal relationships over time.
The frontier of the next decade: AI-driven investing and pre-consensus founder identification.

Guest Bio:

Alex Edelson is the Founder of Slipstream, an LP firm focused on backing top early-stage venture funds. Before launching Slipstream, Alex was part of the leadership team at QED Investors, where he helped shape their approach to portfolio construction, fund strategy, and LP engagement. His legal background and deep relationships across the founder/VC ecosystem have made him one of the most sought-after LP partners for emerging and established seed GPs.

Our Podcast now receives more than 300,000 downloads a month. Are you interested in sponsoring an episode? Please email David Weisburd at david@weisburdcapital.com.

#VentureCapital #VC #Startups #OpenLP #AssetManagement

Stay Connected:

X / Twitter: David Weisburd: @dweisburd

LinkedIn: David Weisburd: https://www.linkedin.com/in/dweisburd/ Alex Edelson: https://www.linkedin.com/in/alex-edelson-604767b/

Links Slipstream Investors: https://www.slipstreaminvestors.com/ Weisburd Capital: https://www.weisburdcapital.com/

Questions or topics you want us to discuss on How I Invest? Email us at david@weisburdcapital.com.

(0:00) Introduction (0:06) Seed funds, AI usage, and diligence processes (1:56) Growing prominence of AI and unique investment approaches (4:00) Constructive GP conversations and Slipstream's strategy (6:11) Comparisons to Palantir and investment beliefs (8:07) Differing views on identifying good GPs (10:55) The importance and role of references in diligence (19:04) Screening out funds and challenges for emerging managers (25:49) Attracting top LPs and building relationships (30:03) The concept of antiselling and excitement for the future (35:17) Closing remarks