JP Sanday, Menlo Ventures | What a Silicon Valley Investor Values in Companies, Markets and Founders

The audio and video are in Spanish. These notes are a translation.

Menlo Ventures, with almost 50 years in the market and $5 billion invested, has backed giants such as Uber, Roku, Carta, and Anthropic. Today, we speak with Jean-Paul (JP) Sanday, one of its partners, specializing in software for large companies such as CodeSignal, Sana Labs, and Photomath.

JP, former Vice President at Summit Partners and a manager at Amazon, CreativeLive, and Kiwi, shares key lessons and investment patterns that Menlo Ventures has gathered by investing in billion-dollar companies. This interview offers a unique view of how a Silicon Valley investor evaluates a startup. Enjoy this great conversation with JP Sanday of Menlo Ventures.

Youtube Timestamps*

[6:43] - Great Founders

There are some very interesting ideas about what a great founding team is for Menlo Ventures that JP has mentioned on several occasions.

Menlo has developed the idea of the “performance engine” inside a team. Could you explain what this concept means and how it shows up in practice?

JP has mentioned that in board meetings, they constantly remind themselves how product speed is essential to SaaS success.

What are some examples of speed and execution rituals he has observed?

JP has said that it is not enough to have incredibly talented founders; they also have to transfer their energy and curiosity to the culture of their team.

What practices or behaviors has JP seen in the best founders in his portfolio for translating those personal qualities to the rest of their team?

JP has noticed a common mistake among founders: the obsession with landing the next round of financing.

Why does JP consider this a mistake, and how does it affect decision-making at a startup?

JP has said that “your investor is the most important employee you are going to hire. You cannot fire them.”

How does JP recommend that founders run the diligence process with an investor so they truly get to know and choose their next investor well?

[31:03] - Attractive Markets

JP argues that the best companies do not compete by following a checklist of how to do things, but change the rules of the game toward areas with no competition.

Could you explain this idea and how it shows up in the evaluation of a company’s product?

JP has mentioned that “it is not a more modern version of X, it is a more modern version of how things get done.”

How does this idea show up in the way the companies he invests in do marketing and position themselves?
What have been JP’s biggest lessons on marketing?

[47:36] - Investing in Artificial Intelligence

There is a lot of talk about “wrappers” on top of ChatGPT:

For JP, is there a distinction between a wrapper on one side and a new application that could create significant value?

[59:15] - Final Questions

What are the most important questions you do not have answers to today?
When you think about venture, what is something people are trying to disrupt that you think will actually never change?