Welcome back to Office of the Venture CFO, our monthly series where we talk to the people actually running finance at top venture firms. If you missed last month’s issue with Adrian Galea from BITKRAFT on becoming an RIA and what it unlocked for the firm, you can catch it here.
This month, we’re sitting down with Dan Rochkind, CFO at Lerer Hippeau. Dan came up through accounting, starting his career at Arthur Andersen and spending years at Marker, a global VC firm, before joining Lerer Hippeau in 2019. What makes him an unusual character in this seat: he double-majored in journalism at the University of Maryland, and he’ll tell you why that’s not an accident. On the agenda: what CFOs can learn from the newsroom, how AI is actually landing in the back office, and why Lerer Hippeau rebuilt its entire follow-on discipline from the ground up.
The following content is for informational purposes only and should not be construed as personal legal, tax, investment, or financial advice.
The transcript below has been edited for length and clarity.
Presented by Carta
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The CFO as Storyteller
Venture5: You double-majored in journalism and accounting at Maryland. I’ve seen investors with a journalism background, but never a CFO. How did that come about?
Dan Rochkind: I graduated high school wanting to be a sports broadcaster. I wanted to work in radio or TV, be the next Marv Albert. So I went after a journalism degree. Partway through, I thought, there’s a very good chance I’m not going to be broadcasting the NBA Finals. University of Maryland was open to double degrees, so I picked up accounting as a backup. After graduation, I actually did work a bit in radio and TV, then got my first real job at Arthur Andersen, and that was that.
“We’re the storytellers of the firm. A CFO that has communication skills is absolute table stakes.”
Venture5: How does the journalism background actually show up in the day-to-day CFO role?
Dan Rochkind: Just last night. We’re working through a complicated follow-on round in one of our portfolio companies. There’s a big existing investor who doesn’t want to participate, and we’re trying to get them back in. Our lawyers, the company’s lawyers, the CEO, Eric Hippeau, and I have been going back and forth for days. At eight o’clock last night, Eric emails me: “Can you summarize this?” He’s got a hundred emails in his inbox. So I took all of that and consolidated it into two hundred words. Lead first. Most important information up top. That is not different from what a journalist does after covering a press conference. That’s what I learned my sophomore year at Maryland, and it’s what I did at ten o’clock last night.
The CFO as Strategic Advisor
Presented by Carta
Peter Walker runs the Insights team at Carta, focused on discovering key data and narratives across the private capital ecosystem. In a former life, he was a marketing executive for a media analytics startup and led the data visualization team at the Covid Tracking Project.
The transcript below has been edited for length and clarity.
“The best CFOs are strategic advisors to the GPs.”
Venture5: If you’re a CFO today, is the job less about managing the back office and more about being an active partner to the GPs, hunting down LPs the same way your GPs are hunting down founders?
Peter Walker: The best CFOs are strategic advisors to the GPs. That obviously only comes from excellence across the day-to-day back office work. But the CFO has much more of a financial grounding in what the fund is actually doing and how things are translating than the GPs do. That can be a real benefit when the GP is out fundraising or trying to win founders. On the emerging side, I’ve also heard of CFOs who basically pilot themselves out as interim CFOs for portfolio companies and help deal with messes there. More power to them. Just parachuting into a portfolio company for a bit, that’s a tough part of the job.
Venture5: And on the fundraising side, what’s the biggest thing CFOs aren’t prepared for right now?
Peter Walker: Everything is taking longer. Everything. The initial meetings, the due diligence from LPs, the fundraise itself. There need to be backup plans that account for the first close taking three or four months longer than expected. What are the plays you put in place so you’re not surprised when things get delayed? I’m consistently surprised at how delays in fundraising really arrest the motion of a fund. You should be planning on that being the case. And if it isn’t, congrats, you’re one of the lucky few.
Accounting for Every Dollar When It Comes to Fund Sizing
Venture5: Lerer Hippeau just closed Fund 9 at around $190 million. That’s a meaningful step up from Fund 8. When the firm is deciding to go bigger, what’s the CFO’s role in that process?
Dan Rochkind: We built a very in-depth fund model before we went to market, and we pretty much accounted for every dollar. The core driver was that seed rounds have gotten larger. A seed round today is four and a half, five, six, sometimes even eight million dollars. It was two, three, or four million not that long ago. So to hit our target ownership, we needed larger checks. We had originally targeted around ten percent ownership. We moved that to eleven or twelve percent for Fund 9. Part of that is pure market reality. A thirty-million-dollar round today is not the same as it was five years ago. Our strategy didn’t change. The math did.
Venture5: What else are you modeling out?
Dan Rochkind: Dilution over time, mostly. When you target twelve percent ownership at seed, what does that look like in years three, four, five after the company has raised an A, a B, maybe a C? You model out the dilution scenarios and work backwards from what exit multiples you need to hit your return targets. That’s how you get to the right fund size and the right check size.
The CFO / IR Interface
Venture5: At a firm like O1 Advisors, Dave Rivinus wears the CFO, COO, and IR hats all at once. At Lerer Hippeau you have a dedicated IR partner. How does that interface work?
Dan Rochkind: I actually ran a lot of investor relations myself before Joe came on. I joined in July 2019, we closed Fund 7 that December, and I was very involved. For Fund 8 in 2022, we didn’t use a placement agent, and I pretty much ran the fundraise. Joe has since taken that over, and he’s fantastic at it. He’s better than I am at the relationship side, the constant meeting cadence, the LP conversations. That’s his lane and he’s great in it.
Venture5: Where does the CFO stay involved even after handing off IR?
Dan Rochkind: The portfolio. When an LP asks what’s going on with a company, or why returns look a certain way, that question ends up at my desk. I can tell that story because I know the data. I know the KPIs.
“I think the CFO should know the portfolio better than pretty much anyone on the team.”
That’s the part of investor relations that never really goes away.
AI in the CFO Workflow
Venture5: That complicated round you mentioned, is that something you’d run through AI at all?
Dan Rochkind: We’ve been running a dual process. I’ve been uploading legal documents into Gemini for about two months, alongside our outside counsel, just to see how they compare. And on this one, Gemini didn’t get it right. It was a complicated consent situation where you needed every share class to have a carve-out across two separate documents. Gemini missed it. Our lawyers had a completely different read.
“We’re using AI, but there’s still very much human involvement…we’re still at the point where I have to run a dual process. On anything complicated, you still need a human looking at it.”
Venture5: So where does that leave you on AI adoption overall?
Dan Rochkind: It’s interesting to use and experiment with, and it is the future. It does help with writing and editing certain things. We use Claude internally a lot, and it’s been hugely adopted by our investment team. But in Finance, we’re still at the point where I have to run a dual process. On anything complicated, you still need a human looking at it. I am expecting that to change, and we’ll be able to rely on AI tools more and more over time.
Follow-On Discipline: How 500 Companies and 15 Years of Data Changed Everything
Venture5: Lerer Hippeau has been investing for fifteen years, around five hundred companies in the portfolio. How does all that data factor into how you run things today?
Dan Rochkind: We collect KPIs from our portfolio on a quarterly basis. We’ve had information rights on pretty much every seed deal we’ve done for the last seven or eight years, so we have data not just at the transaction level but at the underlying company performance level. What does a company need to raise a Series A today versus five years ago? What does that look like in terms of revenue? We can actually answer those questions with data, not just instinct. And the biggest thing we’ve gotten smarter on, using all of that, is follow-on investing.
Venture5: What changed specifically?
Dan Rochkind: We used to sometimes look at follow-on checks in a vacuum. Company is doing great, doing everything it’s supposed to do, let’s invest.
“An investment dollar in a closed-end fund is not just a decision on the company that you’re investing in today, but also your other companies that you have in a portfolio.”
If I put a dollar into Company A, I can’t put that dollar into Company B or C later. That opportunity cost is real.
Venture5: How do you operationalize that?
Dan Rochkind: We force rank the entire portfolio. As many as fifty companies, ranked one through fifty. The investment team votes. It’s not just bucketing into tiers. We actually rank them in order. And when a follow-on discussion comes up, that ranking is always part of the conversation. Does this dollar maximize our returns given where else we could deploy it?
Venture5: What happened in 2021 and 2022 that sharpened this?
Dan Rochkind: The bridge to nowhere. Companies struggling and needing a lifeline. Or rounds where a great firm is leading at a valuation that just doesn’t make sense. We saw plenty of Series Bs around that time, hundred-million-dollar rounds, four hundred million pre-money, and the company had eight million in revenue. The lead investor name was great. The price was not.
“We force rank the entire portfolio. As many as fifty companies, ranked one through fifty. The whole team votes.”
I know it sounds like a very easy strategy. But when you’re in the thick of things over the course of a fund, sometimes that gets lost. We want to be very consistent about investing the most amount of dollars in our best companies.
About Dan Rochkind
Dan Rochkind is the CFO at Lerer Hippeau, overseeing the firm’s finances, operations and infrastructure. Prior to joining, Dan was the COO/CFO of Marker LLC, a New York-based venture capital firm. Before that, Dan was a Principal at the private equity firm Siguler Guff and a Vice President in the private equity groups at Fortress Investment Group and Goldman Sachs. Dan graduated from the University of Maryland with degrees in Accounting and Journalism.
