Neil Patel

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Sam Hodges took his first startup all the way to IPO, after raising $370M in funding for it. His latest venture has already raised $160M to help other founders reduce risk. The venture, Funding Circle has attracted funding from top-tier investors like Waterfall Asset Management, DST Global, Rocket Internet, and Union Square Ventures.

In this episode, you will learn:

  • Enabling startups to transfer risk through insurance
  • Why they went to Y Combinator, despite having so much experience
  • The important things you need to successfully raise capital for your company
  • Sam’s two top pieces of advice before starting a company

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For a winning deck, take a look at the pitch deck template created by Silicon Valley legend, Peter Thiel (see it here) that I recently covered. Thiel was the first angel investor in Facebook with a $500K check that turned into more than $1 billion in cash.

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    About Sam Hodges:

    Sam Hodges is co-founder and CEO of Vouch Insurance, a venture-backed commercial insurance business focused on serving the needs of high-growth companies. Previously, Sam served as co-founder and U.S. Managing Director for Funding Circle, a leading global lending platform for small businesses, where he helped scale the U.S. operation to over $1.5B in total origination volume, serving tens of thousands of small businesses.

    Funding Circle went public on the London Stock Exchange in Fall 2018. Before this, Sam played a role in building several other financial technology companies and started his career in management consulting and investing. Sam currently serves on the boards of two private companies. He received his MBA and MS from Stanford University and graduated, magna cum laude, from Brown University. Sam is a Fellow of the inaugural class of the Finance Leaders Fellowship and a member of the Aspen Global Leadership Network.

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    Read the Full Transcription of the Interview:

    Hey, guys. Today’s episode is brought to you by Zencastr. I remember back in the day when I was looking at putting together Zencastr. I was looking for a solution that would help me in putting things together. Essentially, this is what allowed me to bring DealMakers to life. Basically, Zencastr, what it is is an all-in-one solution where you just send a link to the person that you’re looking to interview. They would plug in their computer with their video, with the audio, and then you are good to go. You would piece everything together, give it to your audio engineer or even edit it yourself, and you are off to the races. Now, if you’re looking at getting into podcasting, you should definitely check Zencastr out, and you could also get a 30% discount, and this is the discount code that you will be able to redeem by going to Zen.ai/dealmakers0. Lastly, I was very much blown away when I found out that investing in wine has been one of the best-kept secrets amongst the wealthy. This is now not the case anymore. I came across this solution, which is called VinoVest, and they are a great solution that allows you to diversify investing by implementing or including wines into your portfolio. Take a look at this: wine has one-third of the volatility of the stock market, and yet it has outperformed the global equities market over the past 30 years with 10.6% annualized revenues. It’s a really good way to diversify your portfolio, and you could also get two months of free investing by just going to Zen.ai/dealmakers, and by going there, you will be able to redeem your discount.
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    Alejandro: Alright, hello everyone and welcome up to the deal maker show. So I’m very excited about our guest today I mean he’s someone that I’ve been tracking. He’s progress for quite a while you know, quite an entrepreneur. You know he’s done in multiple times and I think that we’re gonna be learning a lot about raising money. About operating in very regulated segments but nonetheless we’re gonna be learning quite a bit and having some fun. So I think without further ado let’s welcome our guest today Sam Hus welcome to the show. So originally born and raised in California.

    Sam Hodges: Thanks for having me on the show looking forward to it.

    Alejandro: So tell us about your upbringings give us a little bit of the walkth through memory lane, especially growing up in a household where there was a lot of arts. A lot of Vacas going on so a little bit of everything.

    Sam Hodges: Definitely um, so I am ah a very proud west coaster I grew up in Oregon and in California um, my parents are you know scientists and engineers as are my grandparents on on both sides and so I grew up in a very um, academically oriented household. Where learning was really valued I remember when my ah when I was 6 I think my my grandparents got me ah a microscope as my you know birthday gift and that was kind of par for the course for the type of gifts given in the in the hodges household and it was it was a great I mean it was great. Upringing. We didn’t have a ton of money but I got a lot of exposure to. Ideas and knowledge really early gained a great appreciation for science technology engineering. Um you know saw my dad actually try to start a company at 1 point and so definitely you know when I think back some of those early experience definitely have influenced how I thought about my own career. You know, not much later.

    Alejandro: Now out of all things neuroscience and politics it sounds like that was quite an interest of yours so to always 2 2 different things. So I mean how did you become interested in both of those things.

    Sam Hodges: So when I was um, coming out of high school a couple things up it kind of had shaped my interests academically um one was frankly, just familial. Um, one of my uncles is a very prominent neuroscientist was a senior researcher Johns Hopkins for many years and um I think that inspired me and kind of opened my eyes to some of the really interesting thinking and work that was being done in neuroscience and cognitive science and brain imaging and so forth and so when I went to undergrad one of the things I was looking for was a place a school. Where they had a strong neuro and cog science program and then very other kind of side of my brain I guess um, one of my most inspiring high school teachers was my ap history teacher and just really sparked a deep intellectual interest in history economics and politics and particularly how you can use. Um. Different frameworks kind of the intersection of those disciplines to understand. Um, you know the way the world works and and why it works the way it works and so that was also a deep ah area of intellectual curiosity. Ah, for me, you know, kind of early inspiration. You know from ah from a humanist perspective I guess I would say. And so those were 2 things that when I thought about where I wanted to go for for undergrad I wanted a place where I could where I could pursue both.

    Alejandro: Now you ended up in brown but after brown it was really beyond internship how you got into a strategic consulting now one of the things that that I really come across when when I speak with entrepreneurs especially with some of the most successful ones. Is that they have some type of a background in consulting or investment banking or or perhaps private equity or Vc I mean in your case I mean you’ve you’ve done you know a few of those so I guess especially the consulting side. How do you think it has helped you to think about problems.

    Sam Hodges: It’s a great question So I had no idea what I wanted to do with myself professionally coming out of undergrad I definitely felt a bit adrift and I was lucky in that I had a really interesting internship between my junior and Senior year college I kind of lucked into honestly I wasn’t particularly well qualified for it. Um, at ah, an management consulting firm. And so it just it started to you know, peel back the the envelope a bit On. You know this big crazy thing called business and so you know I I decided to put on the shelf. My um interest in getting a Ph D I think earlier in my college career that was my plan but we go to go do something that was much more academically oriented and so coming out of school. Went to a consulting firm. Um, definitely learned a ton I was really lucky to work at a small boutique firm where the partners and principals and managers put a huge premium on developing and coaching Junior consultants and also frankly giving us probably more rope than we deserved in doing client work. And so um, things that it taught me early on one is um that I needed to be really thoughtful and rigorous in approaching problems and thinking particularly if I was interacting with you know, senior people who are under a lot of time pressure to get things done but it also taught me that I could hold my own even in rooms where the people were a lot more experienced and frankly. More more capable. Um than than I was and that I could still you know in a small way at least you know, add some value in those conversations if I really put the work into it. Um, secondly I do think consulting is ah really useful in developing Frameworks and heuristics to think through and solve business problems. And just gives you a lot of exposure really really quickly which I think is useful from a pattern recognition perspective and also frankly in terms of honing you in on the types of businesses or problems that you are more excited about and for me the client work that I love the most I love working with growth companies. And I loved working on new product work and go-tomarkt work and those were things that I really gravitated toward and so that that was kind of a signal to me on some level that I should go in and pursue business opportunities where I could really you know, um, you know, scratch that itch so to speak. So um, you know. I didn’t stay in consulting that long only stayed in for about 2 years but definitely am appreciative of the time that I did.

    Alejandro: And then you transition it to Vc I guess that access or exposure to tech and insurance you know seem to be the the perfect blend with the with the vc site because and we’re talking still at the very early stages of. Ah, fintech I mean at that point now everyone is talking about fintech I mean back then you know there was not that much going on. So I guess what was it like the landscape at that point and and what were some of the what people call on the investment side pattern recognitions that you saw on companies that were performing better than others.

    Sam Hodges: Yeah, it’s a great question. So um to kind of set the time scale this is back in 2006 early 2007 when I transitioned out of consulting and then ended up in a role at ah, a venture capital and growth equity fund and I remember succinctly I was talking to 1 of my former bosses and I told him that I was going to go work. Um, on investing and in Suretech and fintech and he looked at me in a very puzzled way and was like what’s that and that was that would definitely I would say that that was kind of the sentiment at that point in time people did not think of fintech or in sure tech as really standalone things there. No, there were a few examples right? I mean you had e tradede you know. Ah, Paypal was around at this point in time there there are a few others as well. But it wasn’t this vibrant, rich cambrian explosion of companies that we certainly have seen over the last four or five years back then most of the focus was on technology and services for existing incumbent players. So you know software services for banks and and you know non-bank specialty lenders and then also technology um in in my case where I spent a lot of time technology for incumbent insurers and insurance distributors and so I was really lucky I ended up working very closely with a guy named Larry Wilson who a lot of people consider to be the godfather of inuretek terrific guy. Um, you know he’s still around and kicking doing doing some really interesting work as an industrial board member but he’d started a company and and I think it was 1976 um, which was ah ah, ah, company called Policy Management Systems Corporation Pmsa very first in turtech company out there and so having a chance to just you know be at this guy’s elbow as we met companies and did deals was just tremendous exposure for me on number 1 kind of what great looks like as an entrepreneur but then also just picking up on some of the the themes. That make for interesting companies in in kind of the fintech and and trick category more broadly.

    Alejandro: And in this case I mean you perhaps and failed that it was time to take a look at what a company you know that is saying in the hypergrowth mode will look like to to take a look at that you know more internally as an operator on the operating side and you went to second market to buy with Barry Silver I know that there there was quite an an interesting time because you were doing a lot of things at the same time and especially you know there was 1 project that was about to go belly up so I’m sure that that was one of those crazy experiences that gave you access to all the fires that you need to put out when you are a hypergrowth company.

    Sam Hodges: So so working within forberry at that point in the second market has definitely been one of the more formative experiences I’ve had in my career I mean Barry is a great entrepreneur He’s gone on to do even greater things since since when I worked with him and um second market was a really interesting moment in time we were building an electronic marketplace. Illiquid financial assets in a moment during the the great financial crisis when everything was ill liquidqui and so I did kind of Corp Dev strategy work biz Dev working really closely with with Barry helped with a couple fundraisers worked on geographic and product expansions and definitely one of the. Greatest learning moments for me was um, we’re in the heart of the financial crisis. We’re putting in a competitive bid to be 1 of the service providers for tarp and tlf which you know folks if you if you go back and and remember what happened during the financial crisis there obviously were a set of government coordinated you know asset relief programs. And they needed custodians and liquidators for those and we were trying to position ourselves as such and so I was taking the lead on a joint bid with a major real estate services firm a much much larger company than we um and simultaneously was help building up a. Um, a couple of the marketplaces we were launching and I think one of the the weirder days I’ve ever had I went from a series of meetings on that you know government tarp talf program to later in the day working on brokering a home sale for a dis distressed marina on the Florida Coast and so it’s definitely the ability to like you know. Context shift and deal with multiple fire drills simultaneously I think it’s a ah, really vital skill as an entrepreneur and you know working for Barrie particularly at that moment in time at second market definitely stretched me in that day in that way.

    Alejandro: And it’s like you were at all times kind of like preparing and shaping up the path of what would be your entrepreneurial journey because you know as they say obviously I mean your excuse to move to California was the Nba but as they say doing an Mba It’s a really good the opportunity to meet your cofounder for for our potential next business. So everything you know it. It seemed to be aligning but for you, it definitely did and that’s how you got started with your first day baby with your first company. So tell us how that journey was.

    Sam Hodges: Um, yeah.

    Sam Hodges: Yeah, so um I decided to come back to the West Coast and I used grad school as ah as a way of doing that. Um went went to Stanford it was a great experience very entrepreneurial program. Also very you know connected to the tech and venture capital ecosystem and that that was it was just great kind of exposure for me. I spent my first year kind of doing what the normal and Nba thing and I honestly spent a lot of my second year thinking about what type of company. Um I wanted to start I was I was reasonably committed to starting a company and really was just looking for the right confluence idea and cofounders to to do that and so funnelly. Um. Through a whole set of conversations with one of my classmates a guy named Alex tenelli we ultimately got really excited about um, starting a company to solve the problem of small business credit access and our our kind of windows into that problem were twofold first off Alex and a few partners had started and I was an investor in. Um, a set of gym franchises of all things you know, small key card access gyms and we had heck of a time getting a loan for that business and this is despite you know, great collateral, good personal credit willing to do guarantees and so forth, but we could not get $100000 small business loan to save our life and again this is right after financial crisis banks aren’t lending. You know. Economy is still kind of um you know, recovering that that was the first and the second window into this is both Alex and I and in our prior lives. We’ve been involved in you know, investing and in kind of liquidity formation programs where we were forming tens of millions of dollars. For companies and assets that frankly felt a lot riskier than this loan to a a well-performing gym and so that just opened our eyes to the fact that there was a bit of a disconnect in terms of how the capital markets and lending markets were working and so summer of 2011. We started a company to. Um, to solve exactly that.

    Alejandro: Now what was that thing because I mean it was quite a journey in the sense that it was like 2 forces coming together so you had you know what ended up becoming funding circle right? But you had this group in the Uk you guys were in the us. So what was that process like you know all the way to.

    Sam Hodges: Um, yeah.

    Alejandro: Thinking hey maybe it makes sense to combine forces here.

    Sam Hodges: Yeah, so when when we started um the us business. We’d raised a couple million bucks hire our initial team got to launch and we were out doing our second fundraise you know what? what today would probably be called a ah you know series a I think we we think it was technically our b I think we’d called our seed round the a. Long story short though we got to know um a great group of guys in the uk who were doing a very similar business and they were just about a year maybe eighteen months ahead in terms of the progression of what they were doing and they were very interested in doing something in the us and it definitely was in fits and starts. But you know over the series of. Literally about nine months of getting to know them. We ultimately decided that we wanted to team up and so summer of 2013 we we combined those those 2 businesses. Um, we kept the funding circle brand which I think is a really great brand um already had real cred in the Uk and um, you know, kind of rest was history. So beginning of summer 2013 the us arm. But they basically become a ah you know became part of the funding circle group overall and super to nuts I ended up staying involved with that company for about seven and a half years um up until when we took the company public in 2018.

    Alejandro: Because what for the people that are listening to really understand it. Why ended up being the business model of funding circle as a whole. So.

    Sam Hodges: Yeah, so so funding circle was and is a marketplace for small business loans and so the idea was to on the 1 hand um have a very efficient tech forward way of originating small business credit. Um, figuring out how to price and underwrite that credit. Well. And then on the back end of the business and this is the other side of the marketplace have a variety of different ways of foaming liquidity for those small business loans and so we started with retail investors as well as accredited investors in the us and some private funds over time we opened up an institutional hol loan marketplace which. Became a very important source of liquidity for for for the business and then eventually also started doing balance sheet scuritizations as as well and so that’s really what it was designed as was a nonbank digital first lender specifically focused on serving the needs of high quality small businesses.

    Alejandro: I Think that one of the most important I would say is skill sets or or areas where an entrepreneur needs to really shape themselves a little bit is is on being able to deal with uncertainty but then also managing crisis and I know that.

    Sam Hodges: That needed Trump finance.

    Alejandro: In 2016 you had everything happening all at once with a cyber attack and with a bunch of other stuff so tell us what exactly happened and who how do you think that shaped you up to be in order to be able to know hey this is how you deal with fires as an entrepreneur. This is what it what it looks like. So.

    Sam Hodges: Yeah, so um, I’ll start with 2015 was a year of incredible breakout success and growth for funding circle. Um I remember the us operation we we grew that 368 percent year over year um really felt like we had the wind in our back and then. Early in sixteen had a whole set of crises some specific at Fc some much more industrywide that happened virtually all at once. Um, started with the abs market freezing up in early sixteen and there being a whole set of credit issues across the space. Ah, particularly with some of the more mature publicly traded folks in the consumer lending space you saw um a few companies basically not not funding circle but a few of our kind of quasi peers either go bankrupt or have serious restructuring issues and very short over the equity market. Ah, dried up the debt market was already dry and then midway through the year I remember one week where I think we had in a particular time. We had 1 major lending counterparty pullout because they were just worried about general trends in the category. We had a cyber incident that we need to manage. And I had a really detailed regulatory inquiry where we didn’t do anything wrong, but they were doing an industry-wide inquiry which is always really scary. Um, and where we had to be very responsive on very short order and so dealing with twenty sixteen both for funding circles specifically but also just. You know as trying to be a leader in the space taught me a tremendous amount around crisis management. Um, frankly also just leadership as a as a general point. Um, we we ultimately got through it. The business was stronger for it but definitely took a lot out of me during the during during the year

    Alejandro: Then oh kidding now prior to the to taking the company public. How much did the company raise.

    Sam Hodges: Ah, gosh so before funding circle went public I think we’d raised about 370000000 in equity.

    Alejandro: Wow. And and and I guess you know in your case so taking the company public. Obviously incredible company. Really really big operation at what point do you realize hey I think it it probably makes sense for me to take a step back and and see and take a look. What.

    Sam Hodges: Yeah I mean look as ah as a founder or as a senior business leader the decision to take a step back is not 1 to take lightly I felt like a lot of folks were counting on me and I felt like I had a moral obligation to my team to our investors you know, frankly to myself.

    Alejandro: Maybe the next chapter may look like.

    Sam Hodges: To to make sure that if I were going to do a transition I’d I’d do it in the right way and I would say for me the transition happened because 2 things lined up 1 is honestly I was just ready to go I needed a break I was exhausted particularly after the year that I’d had in 162 you know I think I gained and lost probably £25 definitely my my beard went gray through that year and um you know ultimately got to a point where the business was you know, still growing and still had a lot to figure out but it was much more stabilized and so that was really the confluence of things is I felt like I was ready to transition and I also felt like I could without letting people down. And I was really lucky to be able to find a great successor to take on my role. You know as part of the executive group and I stayed on as ah as a board member and advisor and helped continue to help with our us operation for for a bit after I transitioned and I did all of that kind of spring of 2018.

    Alejandro: Then let’s talk about now the the next chapter vouch. So how did vouch the idea of vouch come knocking to you and and at what point do you say to yourself I think I think this has legs it makes sense to go after this one. So.

    Sam Hodges: Yeah, so um, after I transitioned out of funding circle I actually spent a number of months really just trying to decompress and like spend time with my family and exercise and catch up on slate and I’m really glad that I did because after a couple months it really felt like my head head was sufficiently clear. And 1 thing that really stood out for me was I definitely felt like I had another company in me and I remember distinctly had a conversation with um, a pretty prominent venture capitalist at index who had been a major backer in funding circle and index is now also ah an investor in vouch long story short. He gave me a really useful piece of advice which is. You know Sam if you want to if you want to operate you should make a decision. Do you want to deal with your own problems or do you want to deal with other people’s problems and what he was getting at is building a company as an entrepreneur is a very different mindset and has a very different set of tradeoffs versus going in and operating something that someone else built or a series of people have built. Where you’re inheriting problems and your job is ultimately to fix those and for me at that point in time I really gravitated toward building something again from from the ground up and so then it really just came to you know what idea and with what partner or partners and through a series of of kind of explorations. Got into a really good conversation with um Travis who is now my cofounder of vouch as well as our early backers and strategic partners at Ribbit and Silicon Valley bank and Ribbitt has they they had a great run as a fintech focused venture fund. Um, Nick Shalik who’s one of the Gps there was ah a friend from business school. He is actually my next door neighbor for a bet I’d been talking to Nick for years about ideas in you know, fintech broadly and and insurance specifically and he had gone and done a tremendous amount of work around the commercial insurance space. They were excited about the idea of investing in and helping incubate um a new company in the commercial insurance space and Travis was coming out of Silicon Valley bank where svb saw this problem very acutely through the lens of all their clients and so ultimately, um, we all teamed up somewhere of 2018 with really 2 core beliefs in mind the first was this notion that you could use technology and advanced analytics to build fundamentally better commercial insurance products and experiences and the second was we we believed that the venture back ecosystem. You know high-growth technology and life sciences companies really were deserving. Of a dedicated insurance provider on their own right? And so those are the those were the two two beliefs we all got excited about just based on the work that that we’d done and that’s ah, that’s kind of the the inception story for ah for for vouch.

    Alejandro: So nice. So then what is the business model here. How do you guys make money.

    Sam Hodges: So the purpose of vouch is to help entrepreneurs manage their most important risks you know when we think about the role we are playing. It’s to work with entrepreneurial high-grith companies at virtually any stage and make sure they understand the risk they have in their business. Figure out which are the ones they need to transfer transfer you know through insurance and then have the right mix of commercial insurance products you know available so that we can help them ah mitigate and transfer those risks. Um, we are currently set up as a insurance holding company. We have what’s called ah a managing general agent. Um. Ah, subsidiary as well as our own affiliated insurance company. Um, we’ve used that infrastructure and our relationships with carrier as well as reinsurance partners to build a set of um bespoke commercial insurance solutions really focused on the needs of the venture backed ecosystem. And today we will cover companies basically from inception to Ipo across technology life sciences as well as a variety of emerging and frontier tech categories.

    Alejandro: In your case I mean you are proven founder I mean you took a company public. So why did you go into YCombinator

    Sam Hodges: So Yc was a bit of a controversial choice for that exact reason but ultimately got into a great conversation with a couple of the partners there. They really encouraged us to apply and their thought was well gosh if you can spend your time in a Yc batch doing product discovery. Really spending time with other entrepreneurs who are themselves building their businesses won’t that be incredibly helpful for guiding your intuition um around what products need to be built and how do you position this so that you can win in this market and Y C I do think has this incredible ability to. Be on the bleeding edge of where entrepreneurs are spending time and if you take you know what the set of companies that are in any Yc Batch. It’s probably a pretty good proxy or representation for the types of companies that are doing innovative things much more broadly.. It’s obviously not comprehens all of them. But it’s a good indicator of of where where folks are spending time. And so our thought was if we did yc not only would be a great investor and they are a great investor but would also be an opportunity for us to really go deep with with users and and and understand their needs which then would be really helpful in terms of finding product Market fit.

    Alejandro: Now for you guys how much money have you raised today enough.

    Sam Hodges: So to date we’ve raised 160000000 inequity capital

    Alejandro: And how has that the process been like from financing cycle to financing cycle I’m sure I’m sure that the expectations have also ah changed and and also you guys have raised all this money in almost no Time. So I’m sure that you know there’s a lot of listeners right? now you know wondering Oh I Wonder like. Why do you say like going from an a to a B and especially in in a regulated space like a like this insurance.

    Sam Hodges: Um, yeah, yeah, it’s a great question. So my experience around fundraising is every fundraise is a little bit different. There are certain things that are consistent how you run a type process. You think about some of the mechanics like data rooms and terms sheet negotiation and etc. But I would say that the the bigger factors that shape fundraises really do vary based on stage of company general market conditions and also competitive market dynamics early on. We’re really lucky. To have um, a lot of interest in brazen capital quickly because folks bought into this as a need and we had a great great team and I and I say that humbly like I was really lucky to have a great team early on in the company’s journey and that I think was really helpful and since then and this is just I think generally true. As you take a company from an idea phase right? a seed or even an early series a to more of a c or b you know stage business a lot more of it is around data right? The story matters. But you also need data and and kind of proof points to back up what you’re doing I do think insurance and regulated businesses in general. Also have other aspects to them that shape fundraisers one is there are going to be certain investors who frankly, just won’t touch heavily regulated and or complex balance sheet businesses at all and you should just know that going into it right? You don’t need to appeal to everybody all you need to do is appeal to to the folks who could be a great partner for the business. And the second thing that I think is is true about businesses like this is you need a really thoughtful way of telling the equity story that shows you’re thoughtful to some of the constraints that come with this complexity but also have an eye toward building a really high growth really? um, great business. Even in a regulated and or more capital intensive space and so I’m always one to you know, be very upfront that there are certain risks and complexities with this business that may not exist in a traditional software company but at the same time with that comes the fact that there’s frankly less competition and also the fact. We’re playing in one of the largest markets in the world if you look at the amount of commercial insurance spend in the us per year. It’s about three hundred and fifty billion dollars per year. There are multiple commercial insurance companies and distributors that most people have never heard of who have market caps between one and twenty billion dollars so there’s a lot of Tam and a lot of market cap to go around if you can build a really good company and do it in the right way and so that’s always what I’m honed in on is it’s about products. It’s around. Go-to-market. It’s around how you build the infrastructure in the right way.

    Sam Hodges: It’s really around having a thesis around how you can build something that’s big and durable at scale.

    Alejandro: So as we’re thinking that and projecting that into the future, especially for a vouch imagine you go to sleep tonight and you wake up in a world Five years later I mean tremendous news right? and and you wake up in a world where the vision of vouch is fully realized what does that world look like.

    Sam Hodges: So our vision for vouch is to be the leading provider of commercial insurance for innovators and so the way I think about this is market share and market penetration on the one hand and customer satisfaction and retention on the other we are still early days for the startup ecosystem. You know we probably have something like 5% market share for all all startups that are out there. It’s growing really quickly. Our business grew. You know, two hundred and fifty percent plus last year you know we’re on pace for another very strong year so far this one? Um, but you know gaining market share is an important feature. The other though is making sure that the experience we’re delivering for clients at time that we sell them insurance but also through the full lifecycle of their time with us. That’s also really strong what we’re seeing is an industry leading that promoter. Score that’s something we look at ah, very carefully both our unit and premium retention. Year over year are very strong you know we’re seeing well over one hundred percent year over year premium retention a matter of fact, our cohorts grow meaningfully after we acquire a batch of clients and what we’re seeing is frankly, many companies go from being very baby small companies to being very large mature. You know, tech and life sciences companies. All the while. You know, continuing to choose vouch as their insurance partnerer and so I think we are on the right track? Um, well at the same time being very aware. There’s so a long way to go.

    Alejandro: Now imagine I put you into a time machine and I bring you back in time and maybe is that time where you’re still at Stanford you know you are there maybe like brainstorming with your co-founder. You know what’s gonna be that next thing that you guys are gonna build imagine. You had the opportunity of sitting. You and then also your your cofounder down and giving you know this this younger guys a piece of advice before launching a business. What would that be and why given what you know now and only one you only have one one. Ah.

    Sam Hodges: Oh gosh there be so many pieces of advice I was I mean you know Samm at 40 versus sam at least 27 is a pretty different stamp. What? what? What? What? what? I would say is um im I’m I’m gonna cheat I’m gonna give you 2 The first is build a team with complementary skulls right.

    Alejandro: Yeah, okay.

    Sam Hodges: But think a mistake that particularly and Mbas Make is you build a team that kind of looks in acts and talks like you and that is a real mistake in a startup particularly if you want to build a a Tech-d Drivenn startup so focus on complementary skills and the second piece of advice I would give my my younger self is get after it get moving right? Quit Quit analyzing. Quit overthinking things. Um instead build a prototype build something you think people will use get it in the hands of customers and users see what they do get their feedback and then iterate from there and those are things where I mean it’s kind of in the water so to speak in the Valley now. But I think particularly as a younger entrepreneur I Really wish I’d had those lessons hammered into me a bit more would have saved me a lot of time and pain earlier in my journey.

    Alejandro: I Love it So some for the people that are listening. What is the best way for them to reach out and say hi.

    Sam Hodges: Ah, so you can you can find me on email I’m just Sam Dot Hodges at vouch shut us if you are interested in learning more about what vouch does. It’s just vouch dot us I’m also on social. You know Twitter on hodgesam so I’m pretty easy to find and. Always love interacting with other entrepreneurs and folks in this ecosystem so please do look me up if I can be helpful in any way.

    Alejandro: Amazing! Well hey sam thank you so much for being on the deal maker show today

    Sam Hodges: My pleasure. Thanks so much for having me.

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