Show Notes
Matt Murphy is a partner at Menlo Ventures and led Anthropic's Series D.
Before Menlo, Matt sat in Google's board meetings at Kleiner Perkins from the first check to the IPO, and then backed Anthropic before it had a product or revenue.
We talk about the similarities between early Google and Anthropic, bending all the rules to invest at a $4B pre-revenue valuation, raising a $500M+ SPV at an $18B valuation without being allowed to show LP's a single financial (and the 30 to 45 days he thought they might not pull it off), the three LP's who each made over $1B on the bet, the Anthology Fund check that became OpenRouter and four other unicorns, Menlo's barbell portfolio strategy, avoiding the messy middle of early growth rounds, and why most of the 70+ neolabs won't make it.
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Timestamps: (0:00) How to read Anthropic's S-1 (1:21) Do AI companies actually make money? (2:23) Google didn't want ads. Anthropic didn't plan on enterprise. (4:51) Bending the rules to back Anthropic pre-revenue, pre-launch (9:50) You can't be a leading AI firm without a top model company (12:00) Leading the Series D at $18B six months later (14:22) Why the best researchers chose Dario (15:25) Menlo's first-ever SPV, nearly the size of the fund (16:44) The LP meeting that sparked a $500M SPV (19:18) Raising at $18B without showing financials (20:04) Three LP's made $1B+ each (24:23) Why Matt joined Menlo in 2015 (26:00) Rebuilding Menlo over the past decade (32:49) Venture as a team sport (35:45) How to keep a challenger mentality (38:15) Why VC firms decay (41:31) The Anthology Fund: OpenRouter, Wispr, Goodfire (42:27) Ownership vs. backing the best (46:10) Why this isn't 1999 (48:06) Frontier vs. open weight models (51:29) The barbell portfolio strategy (53:54) Avoiding the messy middle between early and growth (55:07) How to spot a category leader (57:18) Fortune 5000 AI adoption: "almost none" (59:06) Menlo is in 10 of 70+ neolabs: Skild, Chai, Axiom (1:02:13) Where $1B AI startup raises actually go (1:04:18) Phase 1 vs. Phase 2 of AI (1:06:26) What the AI IPOs mean for venture (1:09:11) What Matt does differently after 25 years (1:10:52) The Alex Smith lesson
Referenced: Anthropic: https://www.anthropic.com/ Menlo's Anthology Fund: https://menlovc.com/anthology-fund/ Menlo's Modern AI Stack: https://menlovc.com/perspective/the-modern-ai-stack-design-principles-for-the-future-of-enterprise-ai-architectures/
Follow Matt Twitter: https://x.com/mmurph LinkedIn: https://www.linkedin.com/in/matt-murphy-0415543/
Follow Turner Twitter: https://twitter.com/TurnerNovak LinkedIn: https://www.linkedin.com/in/turnernovak
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