Grace Hanson is a founder who scaled Seagull Cognition and is now building Elysian. JoAnne Artesani is the Founder & CEO of Sproutr, a leading insurance program design firm. JoAnne brings experience from AIG and Hippo to the MGA world. Peter Tilbrook is the Founder of Loro, a specialty insurance platform, and host of “Age of the MGA” podcast. Jamie Cuffe is the founder of Pace and a former Sequoia data scientist with experience building investor relationships across multiple ventures. Omer Rimoch scaled PayEm and is now leading the growth of Advance payment technology.
In this episode of FounderLM, Marissa Buckley brings together these founders to discuss the red flags founders need to watch for and the signals that reveal an investor’s true character before you sign the term sheet. From dismissive questions about capability to the wine-and-dine-then-ghost pattern, from negotiation dynamics that predict your entire relationship to terrible advice that reveals lack of real experience, this episode shows you what to watch for when promises don’t match reality.
Grace: Dismissive questions reveal lack of imagination and conviction. Grace got crystal clear signals early. One investor asked if at her stage of career she thought she could “put in the time necessary to build a successful business.” Another said, “Well, you know, you’re just a claims person building technology. How are you going to do that?”—in a very scathing tone. These investors showed they had no imagination and no conviction about Grace as a human being.
JoAnne: The negotiation period predicts your entire relationship. JoAnne shared a critical insight: how you navigate the negotiation and contract period together is very insightful into what your relationship dynamic will be going forward. If there are early signals before the ink goes on the page—what gets anchored in conversations, how hard and difficult it is to navigate and reach consensus—this is foretelling what the next experience is going to feel like.
Peter: Terrible advice reveals lack of real experience. An investor suggested Peter’s team shouldn’t focus on the US market, which is a market that has more or less doubled in size in the last seven years and has the most important MGA sector globally. Instead, the investor thought they should focus on developing markets like South America or Africa. Peter’s immediate question: “In your experience, how much have you sold into those markets?” Their response…it will surprise you.
Jamie: Evaluate the full team you’re getting, not just the board member. You can get a lot of signal on the upside by evaluating the broader ecosystem. With the best investors, you’re getting operating partners, portfolio services, recruiting platforms, and access to the broader portfolio for collaborations. During diligence, meet the full team. Jamie describes exactly how to do just that.
Omer: Be meticulous about investor composition. People sometimes miss the importance of board composition. If you’re a FinTech company selling into insurance, you probably won’t find one investor who knows deeply both FinTech and InsurTech. You choose your investors like you hire employees.
“I had one very big investor say to me, ‘Well, you know, you’re just a claims person building technology,’ and ‘How are you going to do that?’ in a very scathing tone... That tells me they certainly don’t have any conviction about me as a human being.” — Grace Hanson
“How you go about the negotiation and the contract period together is very insightful into what your relationship dynamic is going to be going forward. So if there are some early signals to be had before the ink goes on the page... this should not be ignored.” — JoAnne Artesani
“They decided we shouldn’t focus on a market that has more or less doubled in size in the last seven years and has the most important MGA sector globally. Instead, they thought it was best that we focused on developing markets like South America or Africa. So my immediate question to that was, ‘In your experience, how much have you sold into those markets?’” — Peter Tilbrook
“You’re not just getting one person on your board, you’re getting a broader team—operating partners, portfolio services, recruiting platforms. I think it can give you a lot of conviction around the full team that you’re getting.” — Jamie Cuffe
“You probably will not find an investor that knows deeply both FinTech and InsurTech. So get some FinTech people around you, get some InsurTech people around you... You basically choose your investors like you hire employees.” — Omer Rimoch
Learn more:
Elysian: elysian.is
Sproutr: sproutr.com
Loro: loroinsurance.com
Pace: withpace.com
Advance: advancehq.com
RevUp: revupstudio.com
Read Joe’s article that inspired this series: Founder’s Due Diligence Guide
Meet us in the comments and share your stories or questions for future episodes. What red flags have you seen in investor conversations?
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