At a recent StartUp Health Fireside Chat, Unity Stoakes sat down with Greg Yap, Partner at Menlo Ventures, for a wide-ranging conversation on where health AI investing is headed and what founders need to know to compete in it.

Yap's path to venture is unusual for how operational it is. Before Menlo, he ran the cancer diagnostics lifecycle at Roche/Ventana, taking devices through the FDA six times across Class II and Class III approvals and running trials across most major global regions. He spent years at Affymetrix during the early days of genomics, starting and running both the company's genetics and diagnostics businesses. He also founded and ran two companies of his own: BlueLight Therapeutics and PyrAmes, a digital health remote monitoring company. "A common throughline has always been novel technology being developed, typically very high throughput, and then, you know, almost always some form of AI or machine learning to analyze that flood of data," Yap said of the arc that eventually led him to investing.

Yap has been a Partner at Menlo Ventures since 2017, and joins the conversation as the firm celebrates its 50th anniversary. Founded in 1976, Menlo now positions itself as a leading AI investor across sectors, from foundation model companies like Anthropic to AI infrastructure, fintech, cybersecurity, and healthcare. The firm organizes around sector "pods," pairing specialists to evaluate deals at the intersections, such as consumer and digital health, and invests across two funds: a core fund for seed and Series A, and the Menlo Inflection Fund for growth-stage rounds through Series D.

That structure has paid off. Menlo's annual research into AI adoption found healthcare to be the number one sector in AI adoption for two years running, with patient engagement the fastest-growing use case within it. That thesis work directly informed the firm's investment in Assort Health, a leader in AI-powered patient engagement. "That's kind of an example of market research, thesis work, and investing all coming together," Yap said.

Asked what he looks for in early-stage founders, Yap offered a reframe that reflects how fast the tools themselves are changing. "In this era of AI, product differentiation becomes a more fragile moat," he said. Building a strong product is no longer bottlenecked by the number of engineers a founder can hire. It comes down to how well a founder understands the customer's workflow and can translate that understanding into product, fast. "If the differentiation of the product decreases, it really becomes an assessment of the team," he said. "Do we believe the team will continue to build better and better products, ahead of the pack?"

That same lens shapes how Yap evaluates whether a company's AI claims are real. He pointed to demos that genuinely land, and to founders who can go deep on the technical decisions behind their stack rather than reciting a pitch. It's part of why Menlo pairs partners with deep technical backgrounds, including former leaders from Splunk, Atlassian, Glean, and Palo Alto Networks, on every evaluation.

Health Transformers in the audience pressed Yap on how the bar for early-stage fundraising has shifted, and on how investors judge product moats when AI levels the playing field. His answer: the goalposts around what counts as a "seed" round have moved, not because expectations for a true early-stage company have changed, but because AI tools let founders reach product-market fit signals faster than before. Larger seed rounds now often carry expectations once reserved for a Series A. His advice held steady across stages: raise a little more than you think you need, because the odds you'll need it are higher than founders expect.

Yap closed with real optimism for the builders in the room. The ability to go from idea to customer feedback faster than ever, he said, is unprecedented, and it's opening the door for a wider range of teams to build meaningful companies, not just the largest ones.

Curious what's next for continuous monitoring, brainwave interfaces, and how Menlo evaluates diagnostic-space investments? Members got the full conversation, including live Q&A with Greg. Join the StartUp Health community for access to Fireside Chats like this one, in real time.