How today’s startup market isn’t like 1999, and what you need to raise a hot Series A

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2021 as the wound Below, the exchange wanted to know what could happen if startup music stopped playing. So we got the veteran venture capitalist Matt Murphy to talk on the phone.

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Murphy started his career Joining Sun Microsystems in the mid-90s, enterprise shop little perkins in 1999, where he remained till 2015. From there, the investor switched teams to Menlo Ventures, where he operates. For a little context, Murphy has investments in DocuSign, Egnyte, AppDynamics and Carta, among others.


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But most relevant today is his experience investing during recessions, which included both the 2000-era startup contraction and the 2008 financial crisis. So, armed with questions and a recorder, we chatted on a range of topics from current startup benchmarks to sustainability of today’s startups and changes in the overall startup hit rate.

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Our conversation with Murphy was extensive. To manage the length of it, we’ve divided their answers by topic, adding subtitles in places where the topic has changed slightly. We’ve also swiftly edited our questions and made minor edits to the transcript for clarity and length, including the expansion of certain words.

enjoy your snow day Reading!

On whether the current period is overheated or supported by fundamentals

Matt Murphy: Well, I’m pretty ok with the investments already made, because it makes you feel like a hero, and it hurts a lot by trying to get into new stuff, because it makes you feel like a chump. [Laughter]

[But yes,] The way valuations have changed and continue to change in a relatively short period of time is astonishing. Certainly more than in 1999. It seems to have been more than a sustainable period. It’s over-distributed, and every time you think it’s a new maximum, something else happens.

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