Why Menlo Ventures’ Matt Murphy Teams up With Jyoti Bansal on VC Deals

On Sep 24, 2021

Matt Murphy invested in Jyoti Bansal’s company, AppDynamics, which Cisco bought for $3.7 billion.
When Bansal cofounded VC firm Unusual Ventures, he began referring founders to Murphy.
Murphy and Bansal have since coinvested in Relyance AI and Vivun.

Matt Murphy, a partner at Menlo Ventures, is always on the hunt for good investment opportunities. Over the past few years, he’s found a reliable source: Jyoti Bansal, the founder of AppDynamics and cofounder of Unusual Ventures.

“When Jyoti likes something, there’s a really high signal there, in my book,” Murphy told Insider.

Within the past year, Murphy and Bansal have coinvested in two startups, the pre-sales software company Vivun and the code-compliance company Relyance AI. Bansal has also helped connect Menlo to two of its other portfolio companies, Unravel Data and Endgame.

But before Bansal became a trusted peer of Murphy’s as a VC, he was once a fledgling startup founder. Murphy, then at Kleiner Perkins, met Bansal when AppDynamics was raising an early round of funding. Right away, he recognized Bansal’s engineering talent and domain expertise but wanted to wait to see how Bansal matured as an entrepreneur.

Two years later, the answer became clear. Not only was AppDynamics’ business growing at a brisk pace, but Bansal himself struck a commanding presence, Murphy recalled.

“He had gravitas,” Murphy said. “His hair was spiked up. I was like, ‘Whoa, this guy’s suddenly a badass.'”

Murphy ended up leading AppDynamics’ Series C round in 2012. Five years later, Cisco acquired the app-analytics company for $3.7 billion, just before the startup was set to complete an initial public offering.

After the experience of taking AppDynamics to an exit, Murphy and Bansal knew they wanted to work together again. Bansal told Insider he admires Murphy’s sense of empathy for founders, his transparency in communication, and his ability to offer ample support without micromanaging.

Matt Murphy, partner at Menlo Ventures, wearing navy-blue zippered fleece and khaki pants and sitting on gray couch with table in background — Matt Murphy, partner at Menlo Ventures.

Bansal soon went to work on other startups. He has since cofounded software-delivery company Harness, which Murphy has backed at Menlo, and cybersecurity startup Traceable.

But Bansal also developed a greater interest in investing in other founders. In 2018, alongside John Vrionis, who was previously at Lightspeed Venture Partners, he launched Unusual Ventures. Soon enough, Bansal started referring some of the founders he was working with to Murphy for their later rounds.

Unusual makes seed investments and also runs an accelerator program of sorts, Unusual Spark, for pre-seed companies. That stage of activity makes the firm a good investing partner for Menlo Ventures, which focuses on startups raising Series A rounds, Murphy said.

Then of course, there’s Bansal himself, who Murphy says excels both in the technical and business aspects of building a company, and can recognize and cultivate those same traits in other founding teams.

For instance, Bansal was familiar with Abhi Sharma, the cofounder of Relyance AI, from his work as an engineer at AppDynamics, while cofounder Leila Golchehreh had ample experience collaborating across legal and engineering teams in her previous role as the data compliance officer at Adaptive Insights.

It also helps, Bansal told Insider, that he’s still in the trenches as a founder himself, whereas some investors’ experience of operating companies might be outdated.

“By being an entrepreneur now a second time, third time, I’m in the middle of solving some of the challenges myself,” he said. “When I invest in some company, I can tell them my experiences from a very current perspective.”

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