Addition of nanoparticles to a polymer can drastically affect the mechanical properties and structure of the nanocomposite. Here we investigate the nucleation and growth of voids that precede craze formation and the early crazing itself by use of coarse-grained Monte Carlo and molecular dynamics simulations. We investigate the role of deformation rate, local density, local rod orientation, nonaffine displacements, and local elastic moduli. We observe that for both pure polymers and nanocomposites, regions of low local elastic modulus are more prone to failure. Additionally, it is found that Voronoi volume can anticipate void formation and that it is also a predictor of failure, particularly in composites. After the onset of crazing, it is found that nanorods incorporated into the crazes rapidly orient themselves to match the direction of the polymer fibrils, but nanorods in bulk regions remain randomly oriented. We further find that attractive rods resist incorporation into the developing crazes and that this effect is stronger with increasing rod length.