1Mby1M Virtual Accelerator Investor Forum: With Ben Narasin, Founder and General Partner at Tenacity Venture Capital (Part 1)

Ben Narasin is Founder and General Partner at Tenacity Venture Capital, a new Seed fund.

Sramana Mitra: Let’s start by having you introduce yourself a little bit to our audience – both your personal background and the genesis of Tenacity.

Ben Narasin: My background is mixed. I spent 25 years as an entrepreneur that culminated in starting one of the first e-commerce companies in 1993. Then in 1999, I was able to take that company public. Since I didn’t raise any venture capital and I bootstrapped it, I still had control of that business when the bubble burst. I was able to take it private which allowed all the shareholders to participate equally and fairly. That was in New York City.

I left and moved west to California about 18 years ago. I became very enamored of the entrepreneurial community here and became a seed investor. I was recruited to build and run the equity practice of a large venture debt shop. In 2017, I believe there were three different organizations. Those were the three institutional seed funds. Then I had two $5 billion outcomes in a year.

A lot of my friends I had gotten to know in venture started talking about crossing over to become a traditional VC. I spent the last six years as a traditional VC, most recently, at NEA. They’re a really phenomenal group of people. Only about a month ago, I spun out to raise a new seed fund called Tenacity Venture Capital. It’s a blend of my 25 years as an entrepreneur and my 14 years as an investor.

I’m now an entrepreneurial investor. I’m out raising money just like all the entrepreneurs I’ve talked to. It’s going well. While I was told it would take about a year, I was able to raise the first half of the fund in 25 days. Having a 14-year track record with a lot of high-performing funds has made it a lot easier versus just having a theory of things I might want to invest in. I always say, “I need five things to make an investment. People, people, people, a great idea, and a huge market.” I want to fund phenomenal founders who have ideas I love and who have the opportunity to build unbounded businesses.

Sramana Mitra: What sized funds are you building with Tenacity?

Ben Narasin: It’ll be a $50 million to $60 million fund. I look at about 1,400 to 2,000 pitches a year, but I only fund about 7 to 10. Since this fund will be leading and co-leading, I assume it’ll be seven. I looked at my pace, which I don’t want to change. If things continue, it looks like I’ll have more capital available. It is important to me to maintain the rigor of keeping it in that size. When people raise more money than they plan, it changes their behavior. I don’t think it changes it in a positive way. 

Sramana Mitra: In the 90’s, the venture funds that worked in the early stages used to be about $250 million to $300 million. Then they started changing size, and started becoming billion funds. They lost the capacity to do earlier-stage investments. 

Ben Narasin: There was this gap in the market. You had a variety of angel groups and angel investors. They were very small checks and slow processes. On the flipside, all these venture funds that used to be a few hundred million dollars turn into multi-billion dollar funds. They had to write bigger and bigger checks. It’s very hard to scale venture capital. I’m not sure you even can.

When you have the small and slow with the angels and you have the bigger checks in the venture, in the middle is what is now seed. It’s a great opportunity – just creating a model on the back of the fact that the web had empowered people to start businesses so quickly and so inexpensively. It’s been a successful category.

This segment is part 1 in the series : 1Mby1M Virtual Accelerator Investor Forum: With Ben Narasin, Founder and General Partner at Tenacity Venture Capital
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