The story arc of a venture capital firm is long. A firm’s reputation can wax and wane over decades. See the multiple chapters of the Kleiner Perkins history.
The key to being on an upward swing is, unsurprisingly, making great investments.
A power law company doesn’t just generate returns. It can change the probability of making the next great investment too.
In SignalRank’s data, we can now visibly see the impact of how even a single investment can transform a franchise.
Spark Capital & Menlo Ventures both participated in the Series C for Anthropic in May 2023 at a ~$5bn post-money valuation.
Figure 1 shows how the ranking of each firm at Series C in our model has been transformed since 2023. We see how each firm held relatively stable rankings (before the madness of the ZIRP era), and then sustained excellence since 2023.
Spark is currently ranked #4 at Series C, while Menlo Ventures is ranked #19 at Series C.
Figure 1. Series C ranking on SignalRank model, 2016-26
Source: SignalRank
SignalRank’s model gives funds credit for three years for any investment (and then disregards investments from 3+ years ago). The performance of a Series C investment into Anthropic boosted their rankings.
We are now 3+ years from this investment, so the Anthropic round no longer contributes to their score and yet they both continue to perform well. They aren’t highly ranked merely because of Anthropic anymore.
Notable Series C investments in the last three years include:
Spark Capital: Baseten, Granola, Mercury, Neros, Chainguard and Base Power
Menlo Ventures: Modal Labs, Suno, Chai Discovery, Peregrine, and Lovable
The important point is not that every one of these companies will become a power law outcome. It is that both firms have continued to identify and win access to a high quality cohort after the original Anthropic investment rolled off the model.
Investing in a power law company appears to have at least three major benefits which become self-reinforcing:
Higher quality subsequent dealflow: a fund can source & win more potential power law companies because their brand is benefiting from the halo effect of investing in a prior winner.
Demonstrate tangible value add: subsequent portfolio companies may also benefit from access to the firm’s network, expertise and relationships, including relationships created through its position in Anthropic.
Fundraising: the fundraising effect is potentially the most tangible. Menlo announced $3bn of new capital in June 2026, its largest raise in 50 years. The Information reported in March that Spark Capital was raising approximately $3bn, around 50% more than its 2024 vintage. These raises give both firms substantially more capital (and the ability to continue to attract high caliber investment talent) with which to compound their investment firms.
A true power law investment can become a franchise flywheel. We are now starting to see this clearly within the SignalRank data.