Benson Oak Ventures: Launching the Founder Carry Program

Benson Oak has been investing since 2000 with funds active in Europe, the US and now Israel with its 5th fund, Benson Oak Ventures. The industry known as venture capital is young — getting initial steam in the 1960s before booming after the Internet era — and has engendered virtually all the great tech companies such as Google, Facebook, Amazon and recent IPOs Dropbox, Slack, Zoom and Tel Aviv-based Fiverr.

Since that time, Funds have become bigger and bigger, now totalling approximately $160B globally. The business proposition of venture capital is to take tremendous risk by backing ideas and passionate teams in return for the potential of outsized returns resulting purely from success. This now has become intertwined with the business of fund management: raising larger and larger funds with accompanying management fees, which often dwarf the carried interest earned for successful investments.

I believe great VCs around the world are those that aim to get back to the roots of venture investing and shape their very existence around creating new companies and industries. Benson Oak Ventures is being crafted in this mold with the tag line — we are in the business of building great companies. Our investment strategy is to back business to mass market (B2M²) companies led by passionate and visionary Founders and provide the financial capital and operational value-add to support and assist these Founders in building transformational companies. We will be announcing a number of new investments in the coming weeks that fit this approach.

For this blog post, I would like to lay out the underlying tenets of the Benson Oak Ventures franchise, underpinned by the principle of being Founder-first — defined as supporting Founders in the difficult, arduous and often painful task of building transformational companies. This includes the announcement of a new Fund program that manifests this principle.

The pillars of the Benson Oak Ventures approach rest on innovative elements to support Founders and place them as first priority. The three operational elements of our strategy include

1. Value add as core skill set. All our personnel and venture advisors are brought on with the express purpose to provide help to our companies and we form investment consortiums with the express goal to get more value and brains around the table.
2. Conviction model. We reject the notion that “someone else always has to lead the next round” — if our Founders are doing well, we do not necessarily want them to leave their seat! We therefore have a specific strategy to double and triple down on the best companies in our portfolio, either as lead ourself or as co-investor alongside value-added leads.
3. Firepower as an Asset — as part of this model, we aim to provide capital quickly to companies when they are doing well to accelerate their growth without wasting precious time fund-raising. To achieve this we leverage not just our fund but our network and LPs themselves as co-investors.

The 4th element personifies the Founder-first approach in a literal way.

Founder Carry Program

All venture capital teams receive carried interest, a share of the profits from returns of the Fund. We are proud to announce the Founder Carry Program in which we will allocate a pool of our own carried interest for the benefit of all portfolio Founders. Every BOV co-founder will thus effectively have an ownership interest in the Fund and, by extension, each portfolio company (yes, no matter how your specific investment goes) — thereby aligning ambitions of both entrepreneurs and investors in transformational companies, emphasizing the fact we are all in this together as one team and encouraging mutual support for entrepreneurs across the portfolio.

Benson Oak Ventures is building a family of the best founders and companies focused on mass market solutions that create and transform industries. By sharing our carry, everyone is invested in each others’ success, made actionable with round tables sharing proprietary strategies, avoiding pitfalls and in some cases, deeper integrations around cross-promotion and user acquisition.

We are very excited about our existing portfolio and look forward to extending the Benson Oak Ventures fund to the upcoming new investments. Stay tuned!