1Mby1M Virtual Accelerator Investor Forum: With Ben Narasin, Founder and General Partner at Tenacity Venture Capital (Part 5)

Ben Narasin: You build your business up to $5 million in revenue. It seems like a healthy lifestyle business to me. If you have a 40% gross margin, that means $2 million is flowing to you. If you can keep your operational expenses low, that can be a great living. Later, there are people who will buy you because they want to roll you up. They’re paying nice multiples. It’s rare for businesses that small to be paid revenue multiples, but it’s happening. There’s not just one buyer; there are multiple buyers that drives the price up. I didn’t have a billion-dollar outcome. I was the type of entrepreneur I would want to fund, but I didn’t have the scale that I wanted to fund. It’s funny.

1Mby1M Virtual Accelerator Investor Forum: With Ben Narasin, Founder and General Partner at Tenacity Venture Capital (Part 4)

Sramana Mitra: The most important thing is that big market opportunity. Hypergrowth is not a natural state of business. If every entrepreneur thinks that we have to achieve hypergrowth, that is not viable. Most businesses don’t have the characteristics of being able to meet that hypergrowth criteria.

Ben Narasin: Absolutely agree. Venture wasn’t built to fund really good businesses. It’s built to fund phenomenal outlier businesses. 

1Mby1M Virtual Accelerator Investor Forum: With Ben Narasin, Founder and General Partner at Tenacity Venture Capital (Part 3)

Sramana Mitra: What is your investment thesis? Tell me a bit more about what you like to invest in? What problems in the world do you have your eye on? What segment do you specifically like? Is e-commerce still an interest?

Ben Narasin: I make a very proactive effort to meet every VC in the top firms. An investor has just joined one of the best firms in the world and I took him out to lunch. He told me a story of what he had done. He has created a mobile advertising platform that sold for a little shy of a billion dollars. I said, “I have two really great mobile ad companies you should meet.” He said, “You got to have a lot of naivete to invest in mobile advertising.”

1Mby1M Virtual Accelerator Investor Forum: With Ben Narasin, Founder and General Partner at Tenacity Venture Capital (Part 2)

Sramana Mitra: Today, the industry is segmented in to pre-seed, seed, post-seed, pre-Series A, early Series A. Where are you positioning yourself?

Ben Narasin: I’m happy with anything before the Series A. My focus has always been finding entrepreneurs that I believe are venture-scalable and helping them raise their first venture round. I got over 327 VCs in my eight years as a seed investor. In that eight-year period, between 63% and 71% startups I seeded went on to raise follow-on rounds. Typically, Series A. Those rounds often came from the introductions I made.

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.

1Mby1M Virtual Accelerator Investor Forum: With Rajeev Singh-Morales, Founder and Managing Partner at Alma Mundi Ventures (Part 4)

Sramana Mitra: When it comes to some of the patient monitoring stuff, which is a very active category, all applications of information technology, especially the AI algorithm in drug discovery, how do you view the role of FDA or an equivalent regulatory body?

Rajeev Singh-Morales: I’ll be very candid. I’m not an expert on FDA or the equivalent in Europe. We are working with a company that has developed a technology for the diagnosis of sleep apnea. In today’s world if you’re told by your primary care physician that you might have sleep apnea, you have to go to a clinic.

1Mby1M Virtual Accelerator Investor Forum: With Rajeev Singh-Morales, Founder and Managing Partner at Alma Mundi Ventures (Part 3)

Sramana Mitra: What trends do you see in your deal flow? 

Rajeev Singh-Morales: We are a fund that is mostly B2B. We don’t a have an industry focus. There are certain areas in pharma and biotech which are extraordinarily hot right now. We don’t invest in that. We do invest in digital health. That is really quite interesting right now. Everything around telehealth and remote diagnostics and remote healthcare in the US and in Europe is gaining a lot of attention.

1Mby1M Virtual Accelerator Investor Forum: With Rajeev Singh-Morales, Founder and Managing Partner at Alma Mundi Ventures (Part 2)

Sramana Mitra: Talk about the companies themselves.

Rajeev Singh-Morales: Let me start with one that was just sold about two months ago. Returnly is a firm that we invested in five years ago. It was sold to Affirm for $300 million. It was founded in 2014 by an immigrant from Spain. We invested in 2015 in a convertible note. E-commerce is booming now. Most people buy stuff that they want to return.