Series A is the worst venture insertion point today because the window between seed and growth has collapsed from 12-18 months to nearly zero, so Menlo uses a barbell strategy: much earlier seed investing and later growth investing, deliberately avoiding the middle.
Matt Murphy agrees with the host that Series A is the hardest place to be in venture right now. The window for early growth (what used to be $3-10M ARR) has compressed from a year to a week for breakout companies. Menlo has responded with a barbell strategy — a much more aggressive seed product on one end and later-stage outlier investing on the other. ✦ AI generated
Matt Murphy · 20VC · 2026-07-27 · original ↗
starts at this moment · 34:55
“right now insertion point wise series A is the hardest and that's why we're seeing everyone flock to growth and preede and and how do you think about that having seen so many cycles?”
Yeah, I mean it's tough. I mean, you nailed it, but I mean, what we're doing is a barbell strategy right now, right? So, it's like, hey, when when when is a certain company in a category establish themselves as a leader because, you know, in that kind of 1 to three, you may not even know who the competitors are yet, right? And you're going to pay as if they're going to be the winner because that's just the way the valuations are in that kind of let's say 1 to 10 range. So, we've moved our, you know, we have a fund called inflection fund and we always called it early growth. The real early growth to us meant like 3 to 10 million of ARR. The reality is like for the good companies that window used to last like a year year and a half. Now it lasts like a week or in the case of Max and Lora that's what they do in a day. So uh you know like it's just that that was a hard strategy to keep pursuing. So that's kind of like the menlo inflection classic kind of investment. But really, it's been more to these outliers where they've completely, you know, broken out somewhere above 10 or and that's kind of like market specific where you feel like um they've been anointed the the winner or you believe they will be. But to your specific question around series A, that that's the other side of the barbell. And so what we've done is gone, you know, much earlier.
verbatim transcript · starts at 34:55
34:55now insertion point wise series A is the hardest and that's why we're seeing everyone flock to growth and preede and and how do you think about that having seen so many cycles? >> Yeah, I mean it's tough. I mean, you nailed it, but I mean, what we're doing is a barbell strategy right now, right? So, it's like, hey, when when when is a certain company in a category establish
35:17themselves as a leader because, you know, in that kind of 1 to three, you may not even know who the competitors are yet, right? And you're going to pay as if they're going to be the winner because that's just the way the valuations are in that kind of let's say 1 to 10 range. So, we've moved our, you know, we have a fund called inflection fund and we always called it early
35:35growth. The real early growth to us meant like 3 to 10 million of ARR. The reality is like for the good companies that window used to last like a year year and a half. Now it lasts like a week or in the case of Max and Lora that's what they do in a day. So uh you know like it's just that that was a hard strategy to keep pursuing. So that's
35:54kind of like the menlo inflection classic kind of investment. But really, it's been more to these outliers where they've completely, you know, broken out somewhere above 10 or and that's kind of like market specific where you feel like um they've been anointed the the winner or you believe they will be. But to your specific question around series A, that that's the other side of the barbell. And so what we've done is gone, you
36:18know, much earlier. So spending more time, we've have a specific seed strategy where three partners can, you know, write up to an $8 million check like on the spot. That used to that number used to be three. So we've kind of expanded the aperture and the flexibility for the team to move quickly. But the the hard part in a right now is that Cday the time between
36:39those two things has really compressed. And if you really look at like the the data points between those two rounds, it's like, okay, so they kind of built more of the product. uh they kind of have like five PC's or maybe they had five PC's and now they have a million of error and you're like I know anybody can do that not anybody I don't want to
36:56oversimplify it but it's not really that much of a signal and yet the valuation goes from 50 to you know to 200 or something like that so that's so that's the hard part so we we've really moved earlier um you know kind of the the pre I wouldn't say preede but more like that that that seed motion has become much more prominent for us get in early
37:16especially you know too a lot of these technical projects. We have a very specific strategy around Neolabs, too. We're in about seven of them. Um, but we're not going in with like 200 million. We're going in where we can get ownership early or be part of something that we think ultimately could be a winner and and and and pile in. So, we've we've adapted to the environment