Reflections on Kin’s Journey (Part 1)
With Kin announcing its agreement to be acquired by OCA this week on its path to being a public company, we wanted to share some of the story behind our investment in the company and lessons we have learned along the journey.
Why Relationships Matter
I met Sean Harper back in 2010 when he was building and raising money as the CEO of FeeFighters, a comparison shopping site for credit card processors. Even back then, I could tell that Sean was the type of entrepreneur who was understated, very intelligent, and moved very fast on building products and solving problems. Even though my former VC firm didn’t invest in FeeFighters, we continued to keep in touch over the years, even after his company was successfully acquired by Groupon in 2012 and when he went on to run product for 2Checkout.
About six months after FeeFighter’s exit, Sean sent me a note about connecting while he was in San Francisco. Around this time, I was raising the first of our four funds at Commerce Ventures. During our meeting, Sean surprised me by asking the most unexpected of questions. It sounded something like, “Hey, I’ve always enjoyed our discussions and like your focus area. Any chance you’d let me invest in your fund?”
For those of you who have started your own VC firm, you know that in Fund I, gathering capital is quite challenging. It’s also kind of no fun asking for money…especially from individuals. But in this case, here was this successful entrepreneur I respected asking to invest in my fund.
Just like that, we were partners.
(K)inception
Fast forward three years to 2016, Sean began exploring InsureTech opportunities more strategically. We discussed it from his earliest ideation, but when his plans started to take shape, he shared a draft pitch deck for what was then called Bright Policy, and he asked for some feedback. I thought readers might enjoy seeing that early pitch deck, so I’ve included it below (with Sean’s permission).
Sean identified the main pain points in the traditional homeowners insurance market (specifically, terrible onboarding experiences and expensive/inefficient customer acquisition) and was dedicated to solving them with a tech-first, direct-to-consumer solution. Sean’s background both as a FinTech entrepreneur and a BCG strategy consultant to large insurers convinced me that he was uniquely suited to identify the needs of this market and build a company that could solve them. I also really admired the working relationship and shared experience he had with his equally credentialed Co-Founder and CTO, Lucas Ward.
We moved forward with Bright policy by investing in their very first SAFE round in the summer of 2016, which was truly a friends and family round. Over my 20+ years as a VC, I’ve learned that at this early (inception) phase, almost all of the bet you’re making is on the team, and the rest is about the market opportunity. We loved both, so we invested.
Looking back, Sean taught us that we could rely on that confidence on the entrepreneurs and make investments at this stage. Since then we have invested in several other portfolio companies pre-product (even though this is still not the norm for us). In the next part of the story, I’ll share some of the other interesting lessons we learned…some of which have totally changed how we approach financing rounds and supporting our companies. Hope you stay tuned…
NOTE: Although (for obvious reasons) this article is written from the perspective of Dan Rosen, the whole Commerce Ventures team has been involved in supporting Kin and its team over the years.
