EKMH Innovators Interview Series
An interview series spotlighting global tech influencers, disruptors, visionaries, and of course, innovators.
Built by founders for founders, Vouch Insurance is a new type of insurance company serving early stage startups with proprietary insurance products and risk assessment tools designed specifically for high growth companies. As the only insurance company dedicated 100% to serving tech startups, Vouch has created a platform that is entirely digital, easy to use, and takes a matter of minutes to activate coverage.
Vouch was co-founded in 2018 by respected fintech innovator Sam Hodges, who is also the startup's CEO. Yes, this is the same Sam Hodges who co-founded and until last year served as Chairman of FundingCircle U.S. and led WorkingPoint Software as its CEO. In addition to his role at Vouch, Hodges is a Board Member at RunTitle, a Partner/ Investor at Endurance Companies and Investment Committee Member at Waterman Ventures. A member of Finance Leaders Fellowship inaugural class at the Aspen Institute, Hodges started his career as a strategy consultant and investor in the insurance sector. With co-founder and VP of business development Travis Hedge, an investor with Nationwide Insurance and SVB Capital, the venture capital subsidiary of SVB Financial Group, Hedge leads a team of technologists and risk experts from companies including Silicon Valley Bank, NerdWallet, Zenefits, LevelMoney, Travelers Insurance, Lyft, and Google. This past summer Vouch completed the Y Combinator program.
This past September Vouch celebrated a $24.5 million in Series A funding round led by Ribbit Capital and SVB Financial Group, the parent company of Silicon Valley Bank, with additional participation from Y Combinator, Index Ventures and 500 Startups. Funding is being used to launch in more states, expand the company’s offerings and build out its team. Vouch is already a preferred provider of insurance for Silicon Valley Bank's client base, which includes roughly 50 percent of venture-backed technology and life science startups in the U.S.
"As seen time and again over the past few years, startups face a range of risks similar to large established companies, yet the current insurance market doesn't understand our unique needs. This leads to policies that don't cover what they need to, cost too much, and take too long to get," shared Vouch CEO and Co-Founder Sam Hodges in September. "Vouch is the kind of insurance company I wished existed when I founded my last company."
Vouch products are sold exclusively online. In minutes, approved startups may activate coverage for common risk areas such as general liability, property, cyber, E&O, and D&O. Tailored to startups, Vouch's coverage seeks to be more affordable than typical business insurance, i.e., policies start at $300 per year for basic theft and litigation coverage. As an insurance company, and not a broker, Vouch actively works with its clients to manage, mitigate and ultimately avoid risks. Vouch also offers expert advice and just-in-time coverage to help its startup clients move more quickly in order to help them realize their full potential. According to Hodges, “We are live in eight states today and we’ll be in 15+ by Q2 next year -- so a lot of growth ahead!” Current coverage includes Utah, Oregon, Illinois, Wisconsin, Colorado, Ohio, Indiana, and Michigan, with California coming soon. Those interested can join a Vouch waitlist to learn when their states are covered.
I had the pleasure of connecting with Hodges via email to share his engaging insight on a variety of engaging topics including launching Vouch, startup advice, the importance of always learning, mistakes versus failures and building diverse, well-functioning teams. Our interview follows.
EKMH: Congratulations on founding and launching Vouch! Why insurtech?
Sam Hodges: I’ve spent the past 15 years helping build a variety of companies at the intersection of technology and financial services and I’ve seen first hand how hard it is to get and manage the insurance entrepreneurs need as they build innovative companies. I did a lot of work early-on in my career in the insurance space and it’s always struck me as one of the important -- but also misunderstood -- sectors out there. In light of this, I was really excited to take on this opportunity to build a new innovative insurance business focused on serving entrepreneurs.
EKMH: What problems do you anticipate as Vouch grows and how will you address them? How will you be able to keep costs down?
Sam Hodges: Every new business has challenges. The most important things to do are to be clear-eyed about your purpose -- ours is to help entrepreneurs manage their most important risks -- and also be very willing to iterate in a lot of one’s tactics as you figure out what will work. In our case, our biggest challenges will come from simplifying all of the complexity associated with business insurance down into something that is simple and easy to understand for our prospective clients.
EKMH: Given your past entrepreneurial and CEO experience, how was this launch different from your other ventures? What “surprises” needed more detailed problem solving than you expected?
Sam Hodges: One somewhat unique aspect of Vouch is that we’ve partnered with Silicon Valley Bank -- the leading commercial bank for our focus sector -- and are a preferred partner to them in serving their end client’s insurance needs. As such, we spent a lot of thought (and will continue to do so) in making sure we’re working well with them as a critical launch partner.
EKMH: What recommendations do you have for those starting their own ventures and trying to build a network?
Sam Hodges: My biggest piece of advice for someone thinking about taking the entrepreneurial plunge is to envision three future end-states for the idea you’re pursuing: (1) wild success; (2) failure; or, (3) you end up muddling along. My experience has been that most people don’t think about #3 enough -- are you passionate about a space / problem to be working on it 3-5 years out even if it’s not clear that you’re going to be successful? If you think through what it would mean to devote a lot of time and energy to an endeavor and still not have regrets if things don’t work out quickly, then it’s probably a good sign!
EKMH: How has your education helped shape your values, goals and expectations for yourself and others?
Sam Hodges: I was incredibly fortunate to grow up in a family that deeply values knowledge and learning. I was exposed to a great deal educationally early-on, and this helped cultivate curiosity which has helped me throughout my life. My formal education reinforced this: I had a wonderful experience at Brown, where I went to undergrad, and I’m a huge fan of a classic liberal arts education as a way to cultivate the wide range of skills -- analytical, critical thinking, creative, interpersonal, etc -- that are helpful in whatever endeavors one pursues in their career. I subsequently went to grad school at Stanford, where I received a MS and MBA, and that filled in certain gaps and also helped give me a clear sense of my strengths -- as well as areas where others are better. This set of experiences has been invaluable as I’ve plotted my career and also as I’ve developed as a person.
EKMH: How have mentors played a role into your career? What advice do you have for those building a board and selecting advisors?
Sam Hodges: I was incredibly fortunate to work for a few world-class entrepreneurs early-on in my career; this exposure provided opportunities for me to see how seasoned practitioners approach different problems and opportunities, and also see that there are multiple “right” -- i.e. workable/winning -- approaches to doing things. More recently, I’ve sought out mentors who have wisdom in areas where I’m still learning. I think a continuous approach to developing different types of mentors as one progresses in your career will really help you develop quickly.
EKMH: As a respected leader and true fintech maverick, when do you prefer to work solo versus work on a team?
Sam Hodges: The reality is most problems require sustained attention from energized, interdisciplinary teams to have break-throughs. As such, a huge part of my job is in building and shaping teams. At the same time, I’ve increasingly found that I’m at my best when I can find time to take a step back from the fray to think strategically, and help make sure we’re focusing our efforts in the right way. So, getting the right mix of team-work and individual reflection time is really the name of the game.
EKMH: What personal qualities have enabled you to lead and collaborate well?
Sam Hodges: I consider myself closer to the beginning of my career than the end, and I try to learn constantly. I think this mindset -- a willingness to be wrong, learn, get better, etc -- is really vital to being successful as any leader. I’m certainly not perfect and have a lot still to learn, but I’d like to think that I live up to the “Growth Mindset” model that Carol Dweck developed.
EKMH: How do you find balance in your varying roles as Founder, CEO, board and committee member and rugby star?
Sam Hodges: I’m a big believer in creating a portfolio of things one is passionate about and to do that well means I have to de-prioritize things that are less valuable/important. Getting that mix right is the hard part -- and I don’t think I ever was a rugby star!
EKMH: How has failure played a role in your career success? What have you learned from taking risks?
Sam Hodges: I’d draw a distinction between mistakes -- things where I wish I’d handled them differently, but learned from them -- and failures. The famous Einstein quote sums it up: “You never fail until you stop trying.” Sometimes a business or investment or relationship may not work out the way you’d hope, but the critical thing is to keep learning and keep moving. You only fail when you stop and give up.
EKMH: Vouch is actively hiring. What makes for an ideal team? How has and does diversity impact your past and present teams?
Sam Hodges: The right team is one that has the right mix of skills, where people share common values (which I define as a cultural script for how one should do work, and what behaviors are rewarded) and a shared purpose. Diversity in backgrounds and perspectives is critical in this -- if you can’t create a work environment that’s attractive to a wide range of people, you’ll be short-changing your ability to get the people with the right skills, and you’ll miss out on opportunities to include perspectives which will make you better.
EKMH: Where are your next travel destinations and which books will you bring with you? Which writers are your all-time favorites?
Sam Hodges: I’ll be heading to Japan next week for a conference and to meet with a few prospective partners, and I’ll be taking a mix of books (I tend to bring one paperback plus my kindle when I travel). I read more non-fiction than fiction, but am trying to re-balance that a bit. Right now I’m excited to read How Money Became Dangerous, which was written by a good friend, Chris Varelas, and am a big fan of Murakami, David Mitchell, and the full swath of magical realist fiction writers, so I’ll always have at least one book from one of them with me as well.