Conviction in Dario Amodei's unique insight as the creator of GPT and Anthropic's superior technical benchmarks justified deviating from Menlo's typical growth fund mandate to invest at a $4 billion pre-revenue valuation.
Matt Murphy recounts how Menlo Ventures decided to invest in Anthropic — a pre-revenue company seeking a $4B+ valuation that didn't fit their growth fund — driven by Dario's pedigree as the creator of GPT at OpenAI, benchmarks showing parity with GPT at 1/50th the capital cost, and the thesis that frontier model markets always need a number two player. ✦ AI generated
Matt Murphy · 20VC · 2026-07-27 · original ↗
starts at this moment · 1:55
“how did it come to be how did you get introduced was it obvious how did the investment meetings go just just take me to it”
got on the phone with Daario and Tom the next day and I, you know, I personally was like, 'All right, I'm in.' ... at the time you have like a $600 million venture fund. You kind of try to average 15 million into into a company and along comes a company that's like pre-revenue and, you know, uh and wants a $4 billion plus valuation. Too early for our growth vehicle. ... But you know the easy part was okay OpenAI is absolutely ripping the chat GPD taking off but Daario was the creator of that within OpenAI as you know the reason why he left is because basically he's like open AAI is doing too many things this is the one this is the one big opportunity so you had that kind of like unique insight knowledge conviction around this opportunity ... all the benchmarks you could see that they were kind of better or at the same level of performance as as chat GPT at the at the time and they'd spent like I don't know a 50th of the capital. So these compute multipliers you're like all right there's something special under the hood technically
verbatim transcript · starts at 1:55
1:55call out, but um Anjen, you know, Mida, uh was the one who introduced me. So, An worked uh for me with me at uh at Kleiner Perkins when I was there as a young kind of associate, but he has he was so spiky at the time. So, he's always kind of just been in the flow. We were talking about AI and he said, "Hey, Matt, you got to meet Daario and Tom.
2:16This the one company, you know, said, "Let's do it." got on the phone with Daario and Tom the next day and I, you know, I personally was like, "All right, I'm in." And I'll give you the kind of like the the broader story, but there were part there was part of it that was really easy and part of it that was hard as you can imagine. So, you know, at the
2:32time you have like a $600 million venture fund. You kind of try to average 15 million into into a company and along comes a company that's like pre-revenue and, you know, uh and wants a $4 billion plus valuation. Too early for our growth vehicle. uh where does where does it kind of fit? But you know the easy part was okay OpenAI is absolutely ripping the chat GPD taking off but Daario was
2:58the creator of that within OpenAI as you know the reason why he left is because basically he's like open AAI is doing too many things this is the one this is the one big opportunity so you had that kind of like unique insight knowledge conviction around this opportunity you meet him and he's just like this amazing technical thinker researcher a lot of the best researchers want to work for
3:19someone like that because it kind of mirrors them. It's like that's that's the leader they they gravitate to. And then you know another easy part of it was they had um you know they had basically in it was pre-revenue pre-launch of the model but all the benchmarks you could see that they were kind of better or at the same level of performance as as chat GPT at the at the
3:38time and they'd spent like I don't know a 50th of the capital. So these compute multipliers you're like all right there's something special under the hood technically and my partner Tim Tully who was the CTO of Splunk great thankfully you know part of the team we've built out here I had Tim to kind of dive in with Tom right so that's all kind of like look this is a massive market this
3:58these markets are never dominated by one player there's going to be an alternative who's better positioned to be the number two player than than Anthropic the hard part was what I mentioned like you know wait why are we doing this it's like uh a $4 billion valuation of venture fund. That's not what we're going to what we should be doing, what our LP is going to say. But fortunately and great,
4:19>> did Dario set the price? Did he come into meetings being like, "Hey, the round is 4 billion." >> I don't remember exactly that part of it. Um but basically, you know, if if there was a mistake and and it's hard to look at this uh through the lens of having made any mistake, it's basically like, hey, look, the opportunity is there for you to lead. Um, but I'm like,