Equity Menlo Ventures’ Matt Murphy says the lesson for founders now is that a great model isn't enough
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Jul 22, 2026 
Matt Murphy, general partner at Menlo Ventures with 25+ years investing in tech and AI. He recounts backing Anthropic early and why its growth stunned him. He explains how model advances became a full platform with Claude products. He discusses rapid scaling in startups like Lovable and why AI companies grow faster now.
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Why Menlo Took A Risk On Anthropic Early
- Menlo invested early in Anthropic because Dario Amodei and the founding team had deep technical pedigree and a clear focus after splitting from OpenAI.
- The deal was hard to place in funds: Menlo led at a ~$4B pre-revenue valuation despite fund fit challenges.
Model Plus Platform Drove Anthropic's Leap
- Anthropic's breakout was not just model quality but making the model accessible via Cloud Code, MCP and Claude Skills so customers could plug in data and workflows.
- Those platform layers turned a strong model into a broad, enterprise-ready product that accelerated adoption.
Compute Efficiency Created A Moat
- Technical architecture and compute multipliers let Anthropic build competitive models at a fraction of cost, creating a high barrier to entry.
- Menlo's technical due diligence focused on Tom Brown's systems and the team's efficiency advantages.