mmurph

The biggest lie in AI is that the future belongs to one winner. Every technology wave starts with one company promising that one walled garden is all you'll ever need. And every time, market forces and creativity break the walls down. I cofounded OpenSea and now OpenRouter around the opposite bet: humanity will refuse to be locked in. Intelligence was never meant to belong to one lab, one model, or one gatekeeper. The future of AI is open, plural, and yours to choose.

Anthropic's S-1 just revealed only 250 customers are spending over $10M on AI: Early Anthropic investor @mmurph at @MenloVentures on why we're at the "very tip of the spear" of enterprise AI adoption: "It shows you the value of the technology. If that happens at some large company, you're like, 'Why isn't that happening at more large companies?' Probably because they haven't tried it out enough. They haven't enabled their organization to do it. They haven't re-platformed all their existing applications. Think about this market and how big these companies have become in such a short period of time. Then you look and you're like, 'Wait a minute. How penetrated is the technology in the Fortune 5000?' Almost none. Okay, so they're doing some coding and some productivity. How many of them have really re-platformed their whole application stack? Nobody. We're at the very tip of the spear on all the re-platforming, all the new internal productivity apps these companies are going to build, and their comfort level and understanding of AI. The whole next leg of this wave will be spectacular."

From @mmurph on bending the rules to back Anthropic pre-launch at $4 billion: "I know a lot of people today it's like, oh, $4 billion, isn't that kinda common? But if you roll the clocks back to '22, '23, there were no companies like that. Exiting at $4B was literally a spectacular exit in the entire history of venture. And now that was the entry point. Then you've got issues like, well, what fund does that go in? How does a venture fund do that? And because it's pre-revenue and pre-launch, how does a growth fund do that? So we were caught in the middle. I'm glad we had a partnership that was all in on AI. This was at least the second best company in the category, with the best technical team. The models were benchmarking really well, and it was a massive market. So we bent the rules a little bit to say, 'Let's participate in this round with a goal to lead the next round.' That worked out fabulously. As soon as we invested, we had a different type of relationship with the company. We worked with them on recruiting, talking to customers, and a lot of strategic issues that come up early in a company. Then we saw them put together the deals with AWS and Google, and the revenue flywheel started to spin. The company went from zero when they launched in April to, it's been reported, something like $85 million at the end of the year. We saw that happening in September, October, and jumped on it to lead the round. Unless we had made that small initial investment, we wouldn't have had the relationship to see all of this. Or earned the trust with the team to lead that round."

We have raised a $550M Series E at an $8.8B valuation, led by Atreides. Every major existing investor is back in, and we’re welcoming Baron Capital, Capital Group, Fidelity, Glade Brook and J.P. Morgan. We picked investors who think in decades. Several of them work with law firms and legal teams every day, so they can see where the work is heading. Lawyers are moving from AI assistants to agents that do multi-step work. The money goes there. We’re growing our teams across North America, Europe, Latin America and Asia-Pacific, and going deeper on the Legora aOS. Thank you to the 1,000+ people at Legora, and to the 140,000 legal professionals who use what we build. I say this a lot because I believe it: it’s the best time in history to be a lawyer. We're thankful to be a part of it. Full story: legora.com/blog/series-e

When I joined venture 2 years ago, everyone told me I was foolish to pick Menlo Ventures. Today, research from the best Stanford professor of venture capital ranks Menlo as #3 in 2026, and #1 for <$25B in AUM, with 50 unicorns and only ~20 investors. These rankings rewards being early, leading, valuation, exits and recency. Rankings are just rankings, but it’s extremely rare for VC firms to change reputations so quickly. It’s a small milestone to celebrate. Menlo has spent the last 5 years rebuilding the team with people who have built startups and long time investors. We built a culture around sticking to first principles while staying true to our roots of low volume high conviction bets. In the last few years, we have been fortunate to partner with Anthropic, OpenRouter, Lovable, Suno, Fireworks, Gimlet, Higgsfield, Wispr, Modal, Legora, OpenEvidence and they are really the stars of the show. And we’ve missed innumerably more. However, in venture, you’re only as good as your next deal.

Over the last 7 days, Opus 5.5 is the top model in spending on OpenRouter for 20 of the 29 task categories we track

We are ALL IN on AI. It's nice when third parties acknowledge and quantify how all-in we have been on AI. Grateful to be in the company of such amazing firms who we respect, collaborate , and sometimes compete with. More details of the study here - ilyastrebulaev.substack.com/…

OpenAI tells investors their annualized revenue is $50B for end of September, up from $30B in July, short of the $70B previously reported. Anthropic was at $65B annualized end of July.

Menlo participated in our Seed for a $3m check. They doubled down and led our Series A with a big swing. Since Day 0, and across ups and downs, they (multiple folks at the firm @mkraning @CCgong @venkyganesan @deedydas) have been helping like they are all in. Smart portfolio construction and unwavering commitment & loyalty can co-exist.

Lot of people hating on his phrasing of the “option bet”. Doesn’t bother me at all, and I raised money from Menlo. Any fund who’s got an “option bet” in you whose GPs personally offer to put up cash for you (and when it’s clear you are not their fund maker at the time) to make payroll when you may have all your cash frozen in an SVB debacle is A-ok by me. Happy for them and their big AI bets and wins 👏 👏 🙏 🙏

have to disagree with @venkyganesan here but i can understand where hes coming from as a predominantly series bcdefg investor as an early stage fund we underwrite every investment as a potential fund returner and work with the team to help them get to scale for us every investment matters because we only make a few a year (13 in the past two years+) so every bet we make we want to be a home run and isnt an option call to double down later

What Menlo has done over the last 24 months is exceptional. Yes, they did Anthropic’s round at $4BN that will make them $50BN+ as a firm. NICE! But they then took that and went f****** hard. They do Lovable, Higgsfield, Legora. They compounded the brand win of Anthropic to cement their position from respectfully a slightly ageing firm to being a dominant venture leader at the forefront with Thrive, a16z, Benchmark etc. It is incredible to see and I sat down with @venkyganesan to shoot the s*** on this. 1. Every Seed Investment Is an Option Bet Seed-stage deals function as financial options to discover true outlier potential before committing major capital. VCs must construct a broad enough portfolio to secure sufficient at-bats, only sizing up their position when quantifiable, revenue-based metrics prove an outlier has emerged. 2. What Is the First Sign of the AI Wave Cracking? Market cycles rarely collapse due to equity write-downs. They fracture when levered debt defaults occur. When market participants take on heavy leverage during an AI boom, precise timing becomes as critical as being directionally correct, making debt obligations the primary failure vector when cycles turn. 3. Why Every VC Must Now Prioritize IRR Every startup in the current landscape writes a structural tax to the Mag 7 and hyperscalers for compute and foundation models. Because LPs can buy index exposure to those same public tech giants without fees or carry, private VCs must generate outsized IRR performance, beating public markets by at least 1,000 basis points, to justify private capital allocation. 4. Why LPs Wanting Smaller Funds and Slower Deployment Is BS LPs cannot demand both smaller fund sizes and multi-year deployment paces in the middle of a generational platform shift. Because AI startups face immense capital requirements to scale compute, VC firms that refuse to deploy capital rapidly will watch competitors step in and capture the category winners. 5. The Theory of Reflexivity and How It's Causing Markups Reflexivity creates self-reinforcing loops where fast revenue growth triggers rapid valuation markups, attracting elite human and financial capital that further accelerates growth. However, when copycat investors chase markups for momentum rather than underlying fundamentals, reflexive valuation bubbles inflate until market realities force an inevitable correction. 6. Sometimes You Pay Up Because You Have Unique Insight Premium entry prices are not always the result of irrational bidding. They often stem from an investor's ability to recognize a fundamentally larger total addressable market than the consensus. When a VC possesses unique conviction around an expanding market opportunity, paying above current rates reflects calculated foresight rather than price-taking behavior. 7. There's No Limit to What a Person Can Do as Long as They Don't Care Who Gets the Credit Personal ego remains one of the most expensive liabilities in venture capital and company building. True long-term success requires setting aside individual notoriety, focusing ruthlessly on generating LP returns, and empowering teammates and founders without worrying about who receives the public credit. (links in comments)

Menlo Ventures is on a tear They led an investment in Anthropic at an ~$4B valuation At the time, most thought OpenAI would be the singular AI winner Maybe we’ll see something similar with @FactoryAI? 👀 Welcome to the Factory team @mmurph!

Matt Murphy is a legendary investor with a track record of being very early and being very right. He led the Series D of Anthropic in Jan 2024. Their best model was Claude 2.1. I am thrilled to have @mmurph and Menlo Ventures investing in @FactoryAI. We are still so early.

We're committing $100 million to train 10,000 engineers at our customers and partners. Every exec team I meet wants to go faster. And that often comes down to the best AI + the best talent to apply it. And that talent can be scarce. anthropic.com/news/claude-fr…