20VC: Leading Anthropic's First Ever Round | Will Open Source Threaten Anthropic's Business | Do Margins Matter in a World of AI | Why Triple, Triple, Double, Double is Not Good Enough Today | Why Series A is Hard Today with Matt Murphy @ Menlo
Summary
Harry Stebbings interviews Menlo partner Matt Murphy, who led the firm’s pivotal investment in Anthropic. They discuss the high-conviction thesis behind the deal, the strategic use of SPVs, and Menlo’s barbell investment approach targeting outliers like Lovable and Legora. Murphy argues that while open source is useful, frontier models remain essential for high-value tasks, and he critiques the current difficulty of Series A investing.
Topics discussed
Sponsors and Introduction
Reunion after seven years
The Anthropic investment story
Menlo's new fund structure and SPVs
Normalizing large frontier model rounds
Leading the round and LP reactions
Aggressive sizing and liquidity strategies
Reflections on the first SPV and market heat
Secondary markets and access dynamics
Valuation growth and Lovable investment
Open source vs. proprietary AI models
AI cost reduction and model tiers
Custom chips and full-stack AI infrastructure
Nebius and model optimization market
Ligora and AI in legal services
Series A challenges and barbell strategy
Seed fund dynamics and LP expectations
Menlo's internal fund structure
Bay Area talent and investment conviction
Geographic concentration and global startups
High trust and deal flow management
Ownership focus and LP understanding
Regretted investments and ElevenLabs
Firm culture and compensation
Richer investors and risk tolerance
Growth fund landscape changes
Neo-labs and developer stack opportunities
Future excitement: healthcare and AI
Closing remarks and sponsor reads
Listen ad-free on Castria