"A Garage Full of Mac Minis" — AI, Angel Investing, and the Next Wave of L&A Innovation

Paul Tyler (00:29) Hi, this is Paul Tyler and welcome to another very interesting episode on the future of innovation in the life insurance and annuity space with none other than James Wong as my star guest. James, you got to tell people, who are you? I can't wait to hear this. Who are you and what do you do?

James (00:50) You know, I appreciate being on the show. It's always a fun conversation. And I'm assuming we're going to buckle up and go on a journey that we've never been on, you know, because every day seems to be a different day and different things coming out, dominated by headlines around AI. So I'm excited. So I'll get to my background briefly. You know, I guess you could start, you know, my story by saying I really wanted to grow up and be an entrepreneur, right? Told my parents I want to be in business, which didn't mean a whole lot for my parents who immigrated from Australia and Hong Kong to give my brother and I a better life. And so they said business sounds good. So I got away with that, right? But then as I went to college, I realized, let's start to figure out what I want to do. And so I probably worked every oddball job out there, right? And I got looped into a brokerage firm where I did cold calling. And I was terrible at it, Paul, horrible at it. And I'm struggling and sweating. I look over to my left.

Paul Tyler (01:49) Ha ha ha ha.

James (01:53) A female associate is just crushing it. I think her hands were on her head and her feet were kicked up, but she was crushing it. Look to my right, a gentleman is just crushing it, just smooth operator. I said, you know, there's something to be said about this industry, right? But I think there's probably a better way to enter into it than doing the cold calling, right? It was really difficult and I respect a ton of those folks who went down that path and got bloodied and scraped up from that experience, but it drove me to financial services because I liked the prospect of helping people where they're having to prepare for the future that's sometimes hard to see. And so, love that, got into financial services, ran to insurance actually, and cut my teeth in insurance where I went from not just cold calling, somehow it's like a badge of honor. They had me call on leads that were direct mail-in responses and I went to go do appointment setting. And so I went from a cold caller to now an appointment center, a warmer call, better conversations, and saw what it took to line up opportunities for advisors and agents to go out and meet with folks across the kitchen tabletop and have success helping those families. I would, from that experience, Paul, realize quickly that every agent taking leads was their own business. And so it was really exciting. Some did it well, some didn't. Some spent everything they had and had to kind of work, some built and invested in their business and so I got to see what worked and ultimately what didn't work and junior year of college I said, let me go get my license, didn't tell any of my friends, you know, told my girlfriend at the time I'm gonna do this right, 52 hour course down in San Diego, 12 hours on ethics, now I'm ready to go because I passed my test went out and on my first appointment experienced some tremendous success that you normally don't hear about. But when we gather together in the industry events, I guarantee you, you ask the question, how'd you get in the industry? Someone's gonna say I got lucky because of these two or three sales. Let me tell you about it. And it's etched in their memory. That was me, that first sale. I didn't even want to bring an application, right? I was just like, I'm gonna deliver something. It was an AD&D policy, accidental death and dismemberment policy for a thousand bucks. And I was really good at explaining. You lose an eye, you get 200 bucks. You lose a hand, you get 500 bucks. You lose, you know, everything, then the family can get—

Paul Tyler (04:18) Only in this business.

James (04:20) A thousand. Oh, it was wild. But the family embraced me, came in, I caught them at dinner time and they served me a plate of spaghetti and we sat there and ate and I said, listen, I look like I'm 12 years old, even though I'm 19 years old, but I aspire to take care of folks and what I know about is insurance today. So can we talk about that? And they ended up purchasing a policy. It was great, but that set me on my course, Paul, to say, you know, this industry really is about connection and having conversations about the future that sometimes just get overlooked. And so it was interesting to then take that foray into this industry saying, okay, this is gonna be where I'm gonna plant my flag as a business, you know, an entrepreneur. And I quickly got wrapped into this tidal wave of technology. And I looked at it as a way to level the playing fields, right? We had superior advisors and agents crushing it, having wealth of knowledge, right? Experience, contacts, people, you know, helping them along the way, carrier knowledge, all that stuff. And I had just hours and a drive. And so I really gravitated towards technology during the time, was around 2000s, early 2000s, and the advent of the insurance internet lead, right? The term insurance internet lead. And so my partner and I started to invest heavily in buying those leads and sending out predictably all these applications with the tabs sign here, the examiner would pick it up and we would qualify them on the phone and it would be great. And we'd have checks for $12, $15. We'd celebrate when we got a $73 a month ticket. But we learned we can take care of folks just outside of our region and we can be more across the country, but that pushed me, Paul, into having to learn to support agents. So I was still learning how to become an agent myself while I was then saying, gosh, if you don't answer these leads, right, within five minutes, deliver it into your inbox and calling them, they've already forgot about what they did, right, or they bought from someone else. And so, yeah, so it brought that story of, okay, we need to get a lot of agents to recruit, bring them over, let them know they're gonna get some number of leads. We can't guarantee them. And it could be in Alaska, could be over in Boston, it didn't matter, right? We just needed people to handle those leads quickly as a way to help them build their practice. And so I found a really, really fun niche to just go in and train agents, help them be more successful, and leverage technology to do that in a more efficient way. So that was how I started the brand that is now known today, where I'm kind of in the intersection of where distribution meets technology, but what I've always loved is that carrier products continue to get better. So that's a staple. The demand for our products has always been there and will continue to be there. Now it's a matter of how do you engineer some things so that those conversations happen at a better clip and happen multiple times over at a greater extent.

Paul Tyler (07:28) Yeah, well, I think we actually bonded over APIs, if I remember, that's our first conversation.

James (07:31) Yeah. Yeah. Yeah. You were very inquisitive. James, should I spend a million dollars — the million dollars in my budget — to go build our own thing or should we build APIs to let you access what we have so that gets into your databases? And I said, man, first of all, kudos for asking that question. Oftentimes carriers and well-meaning and well-intentioned, they just go and build out what they think is going to be good for distribution. But you stopped and said, hey man, are these IMOs? They're building some incredible businesses and they're investing their own money into technology. No longer is it ACT or GoldMine. They're building their own CRMs. How do we figure out how do we get that? So it's a nice experience for them. And I loved it. So yeah, I gave you the second option. Make it so easy for us to access your data in a secure way so that we can then power what we need to get done.

Paul Tyler (08:22) And guess what? The problem is all solved. No, it's not. That was it. That was it. One conversation. Way off, but it's like, you know, my first job in — see, this was junior high. You can't make this one up. Small, no, in fact, selling Fuller Brush products. Okay, door to door. You know, leads. This is so funny. My mother had this whole territory. Okay, I got my little section. The best thing I learned about leads, too, but it was called an answering machine. And so we had the 800 number for the whole city. And yes, exactly like you learned. Boy, then it was calling back, calling back and use my programmable calculator to figure out how to drive around the city to drop off the... Anyway, so you know what? Some things change, some things don't. But that's my, you know... That was my...

James (09:22) I love that. You know what was interesting though, Paul, is what I found out, and I don't know if this still exists to the great extent, but you kind of unlocked something, is we would get the lead, and then it's not a tangible product that folks can just go and say, okay, I got a widget, inventory widgets, let's grab it and it's good. We learned quickly that not only do you get them that in front of that opportunity, be it a phone call or an appointment in person, you gotta tell that salesperson how to then have that conversation. You know, and that was where it was really difficult because leads were actually the good part. Now it's a matter of, okay, you're in front of someone, what do you say, right? And that's where I feel the industry is caught up a lot. Now sometimes regulation forces that piece in a good way, but I think technology is also playing a critical role of how we're positioning the products, how we're having the conversations, and the holistic planning piece is, you know, right down the lane of where I think it should be education first approach. I think this is a massive thing for our industry that we've seen probably the last 10 years really kind of get serious about.

Paul Tyler (10:28) Yeah, yeah, totally. Now you undersold that work you're doing with tech. You built a huge, very successful IMO, sold it to a company, helped transition it over, and now you've created a group called the Founder's Chair. Tell us about the Founder's Chair.

James (10:47) Yeah, the Founder's Chair was, well, let me kind of go back. So, sold the business, Fortune 500 company. Awesome, awesome. Seven years ago, everybody on that side, I'd imagine, because I know my side, and we had awesome partners. I think we had 12 of us that inked the deal with that firm. We'd all say it was the best deal. And you don't hear that often where seven years down the line, you say, we're really thankful that we did all that. And I still keep up with all of our associates that are still with and there's a majority that stuck with the firm post acquisition and their career ladders are just growing. It's amazing. So, but sitting in a corporate environment for five years, you know, I got to learn a lot and had a great appreciation for what it meant to get something done internally. But then had an even bigger learning curve on, you know, the idea of having that next million dollar idea, you know, you need to really vet that out in a different way than when I was an entrepreneur. I'd say in the morning, this is a million dollar idea, in the afternoon we're already implementing it. Whether it's good or bad and what it means to whatever the team was working on prior to that, didn't matter. Now it was a greater extent, it's gotta be vetted out. Teams have to be approached and organized. So I share that story because it was such a critical part because being an entrepreneur, I just went fast, break things fast and figure out how to fix it. And that works in certain environments. But when you look to build something meaningful, it does take time and intentionality and a team around you. And so I took those learnings, got to a spot where the entrepreneurial itch got me and I said, you know what? In COVID, there's so many folks that were stuck at home thinking about things and what was awesome, and many people have talked about this, is that the real entrepreneurs were showing up. Because they said, this is a different world, let me go do something again. Those who were entrepreneurs, and there are many entrepreneurs, Paul, you think about the heyday when we started, these were amazing sales people that created a business. But would you say that they're entrepreneurs? Probably not. Well, this was their opportunity to try, and so some said I like, I'm gonna go into harvest mode and use it as an exit strategy for my agency, sell it, and move on, that's great. Others would sit back and say, this is now my opportunity to jump in, let's go do something. And so I connected with a lot of those folks who had a lot left, but you look back on what they've done in their career, ex-operators willing to take risks, they're doing some really neat things. And then they weren't alone this time, they're grabbing technologists to come in and solve the problems that they knew. And so I connected with both camps because no one was on planes anymore. So you can't avoid my phone calls, my emails, my persistency, and I learned a lot about what they were doing to build a different mousetrap, if you will, a different business model. And Paul, what I loved about COVID, and there's a lot of bad, a lot of bad, but the silver lining was for our industry specifically, you could build a meaningful business, right? Beyond a lifestyle business, but not a unicorn. But you could do it with a smaller set of advisors or agents who were completely dialed into what you were doing, and how you're delivering it and the culture and the brand that you're building with them. And you can do it and have a lot of fun doing it with people you like. So that was interesting. You kind of start seeing these big, big, big organizations have some sections break off and they're still good. Big companies are still good, but you can still build these smaller companies. But it was highly leveraged off technology and efficiency that you get from that technology approach. So I took all that to the Founder's Chair and said, let's create a two-sided platform. Loved Shark Tank, always loved Shark Tank. My boys would watch it with me. And so think about friendly insurance folks, ex-operators, carriers who have done it and seen it and really got excited about putting some ideas, but maybe because they've got their full-time gig, they couldn't get too excited about investing into their time or their capital into another firm. But these folks are starting to step one foot out of that nine to five and one step into retirement or that next phase. I'm like, let's bring all those folks in. Let's build a playground for us to play in so that we can then go and attract, and our marketing's done a real nice job of attracting those founders, building some really great stuff. But every founder, if they're honest with themselves, says, is this a problem that people really care about? In the quiet of the night, I think it is, but they don't know. And sometimes that product market fit is off a little bit. Sometimes their belief structure is just every morning they wake up, it's a new thing they're telling themselves. They're going to crush it or no one cares about it. So when you bring those two parties together in a room, the defensible mode of the Founder's Chair, if you will, is the room, the magic that happens in the room where you got ex-operators, C-suite level folks, you've got, yes, we invite the people from the investment ecosystem because we think we're early, early stage and that can only launch some of these ideas into their world where they're willing now to get a seven to $10 million check to a current company because they've got a cap table of size and significance. But you start getting all that key conversations happening in person with 15 to 20 folks that have done it before. It makes for some really interesting things. And what I'm most proud of in the two and a half years is 28 companies have been selected. A lot have been reviewed. But 28 companies have been selected over five events. 17 got funding. 17 got funding.

Paul Tyler (16:26) What you're doing is remarkable, James. Now, I launched an incubator up in Hartford. Now, again, timing is everything. It was just before COVID. And I remember we finally started to get the numbers together. Everybody said, oh, no, you're not going to get VCs to come up to Hartford. And they did. And we had something like 150 meetings. You added up the capital. It was enormous. And then COVID hit. And it was like, ugh. But what you're bringing together is something really different. You've got people with money, not only with the money, but the people who understand the business, which I think is — there is no other place like you in the life and annuity space today.

James (17:10) I hope that we see more because then that means that this validates what we're all seeing. But I will tell you this, Paul, what's really interesting is some people connect with me and say, hey, how much do I, what's the minimum check size? What's a commitment? No commitment of capital. What I do want everyone who gets invited — on the, affectionately we call it funders, the investors, the ex-op operators, the carrier executives — we call those funders. What I say for the funders is I want your insights in the room, because we act almost as a due diligence process and we release the information on the eight selected companies for each event a week before in a very organized fashion so you know who you're meeting with, right? But what makes it really sharp is that they're investing their own money, right? You know, I looked at a fund, right? I think that's fantastic. I just see more of a role where now there's some really interesting vehicles that exist out there that allow us to play a more meaningful role, but we can still organize capital in a good way where we've had some, Paul, and you certainly have seen several of them, where 10 people raised their hand out of the 15. And so now that founder has 10 new people come to the cap table, and we've organized it in an SPV to make sure it's clean and easy and reporting's clear. So there's ways we can continue to have angel investment be organized in a good way. I just spent a whole weekend building out intelligence reports. We'll get to AI in a moment, but that's a wonderful application of AI, in my opinion, because I would have to go and subscribe to something and try it out, figure out if I can get it. But now I just have the reports run automatically. They scan everything out there in the world of the founders that we invested in, puts a little bit of a dashboard piece together on what that looks like and where the concerns are, and I can shoot that out to our funders. And now they're tied into it, but that can be done quite seamlessly now, because some of the portfolio companies we're looking at, it's becoming quite big. Some have 10 companies that they've invested in out of the 17, they're in 10 of them. And so gets exciting, but it also — we've had two exits, a merger already happened, conversion of safe notes into equity because they got in. So things are starting to happen as you'd expect two and a half years in.

Paul Tyler (19:28) Yeah. Yeah, well you've got my little check from one of those, is great. Well, let's come back to the capital because I capital is important. As hard as it is if you're a startup to try to get money, it feels like, oh my gosh, getting a check is everything. Who do you get the money from, especially early on? It's just so critical. But let's come back to that because I think that's a really important point we can't emphasize enough. Let's kind of go back and talk about themes, OK? AI agents, okay. Talk to me about it. What are you seeing? What's going to blow this world apart here that we're headed into?

James (20:11) You know, I'll start with this. So you and I are wired to think about AI in a positive light. I shudder at the thought of if we were to spend an hour, you and I in a dark room, what could AI do bad with our industry, right? And I just kind of leave that off to the side, right? So, but there is a two-side approach to what AI means to people. I tend to take the optimistic view of what does it mean for business? What does it mean for how we look at investments especially, right? And I'll tell you, I would say, if I were a GP, I think it'd be very difficult to deploy capital. I would feel pressure to do it, right, based on the business model and dynamic of that. But I've taken a pause the last two months. It's felt like two years though, Paul, right? But two months to really assess what does AI mean, right? On good days, it means efficiency with infrastructure, right? On incredible days, it means, okay, replacement of other roles, you know, and I made a joke that we grew up in our industry where we could show you success by the amount of cars we had, toys we had. I even sat across and we said, I have an island. I have a mountain I own. There's some things that would show that. I wonder if we're not far from that where you open up and you got a garage full of Mac minis. These are my agents. Each of them I can account for, for $150,000 to $250,000 a year. Count them up, there's 10 of them, boom, you've got your money, right? It could be interesting, right? So I then took my thoughts, right, and said, okay, let me go out to the founders, right? Because I'm thinking about this much. They're thinking about this much because their livelihoods are on the line. If they overpay for labor, which is in startup world, the biggest cost is labor, bringing on the talent around them and to do the work that needs to be done to execute on the vision that they have. So I called three of our very, very successful entrepreneurs that did really well in the TFC event. And I'll break down the three, you know, conversations because they're all separate and unique, right, Paul? One gentleman was proactive and said, James, I've already let go of two engineers. It was hard to do, but the work just simply isn't there because I've mapped that work out to AI agents who are doing incredibly well. And there's no other issues, added issues, I won't say drama, but added issues when it comes to HR and management and change management of what we're doing here, it's just boom, boom, boom, boom. It's really clean. So we dropped that, not to the bottom line, but we'll put that into other places to grow. Love that perspective from that founder and he's continuing to show how he can scale in a very lean model. By the way, his ambition is, I think industry changing. And so it's not one of those I'm going to stall for just this little piece. No, he's applying AI bots to go out and do big, big work and it's handling it well. So there's that one conversation. Second one was interesting in a different way. They assessed and said, you know, we think the capabilities of AI are up to this level. And so everyone who does that level, they are letting go as well. But more importantly, what they're saying is they've got a senior engineer and they're gonna empower the senior engineer to go bring on other senior engineers. But the entry level engineers are no longer in their company, simply because AI bots are great, but you still need that senior engineer to go through and manage them well. And so they're double downing. They're taking some the, I'll call it the cost efficiency and push it over into getting a top flight senior engineer. And they said it's extremely, they're out in Silicon Valley, it's extremely difficult and competitive to get senior engineering to come in. But they're doing a great job, and so that's how they've approached that piece, is let's get rid the entry level and let's go get — let's not just sit on that capital, if you will, that they've saved, let's go get a senior engineer. And I think there's a little optics to that piece, because if you've got the right senior engineer, that builds out and rounds out the team, so when you look at who's on the team, it's quite impressive when you got some people who've done some things. And so respect that. The other one that I talked to was more boutique of a company. And she has done so well in her career in what she's touched because she has this very caring personality and it extends into her business. Now I'm not taking away anything from the first two examples, but this one, she really leans hard into let's build that family environment. And what she's done is she's outsourced some of the job tasks to the AI bots, but then she's expanded and given the leadership team empowerment to go learn other areas of the business, like go-to-market strategy and how they can then apply what they know and their expertise to help support the go-to-market. So still in alignment, full alignment with their company and corporate initiatives, but just expanded role. So it's very unique where the tasks are shipped away. That's consistent across all three of them. But it's what you do with the talent that you have on your table, on your team, that I think each of them have decided this is where they personally want to lead it.

Paul Tyler (25:39) Well, you know, it's actually that's really interesting. It reinforces, James, what I've seen as we've been working through this, which is, you know, to build, to really work with these agents, it's not so much a technology problem. It really is — there's a lot of iteration, a lot of listening to users. I think it's, if I just sold you an AI tool, I just increased your costs, right? To get the value, I have to change the way you work. And I also have to listen to those people I'm selling to. So suddenly, you know, I think, gosh, even when I tried to start one of these companies up and describe this three years ago, right, we would probably have hired 70 engineers and probably had like four people on the business side. It's almost like the ratio's flipped. It just has. So this is interesting. Well, let's keep going. So that's the startup side. So the startups are really quickly learning, iterating, making pivots, making conscious choices, sounds like, about what do you do with the people? Because you can't build a business without a person. You need people, you need a team, I think. But maybe a much smaller team is what I heard, James. Smaller than... And now, now I have a $20 million portfolio that I've got to deploy in the next... Actually, let's make it hard. You know, $50 million... How do I deploy this, right? These are little companies with this many people. This is hard.

James (27:09) So you're pulling out a thread that is part of the pause as well as coming into the Founder's Chair, two and a half years, right? Two and a half years only, but so much has changed. We would look at deals and we'd look at founders and say, could they disrupt the big platforms where the users live and exist today, right? And we got excited about the value proposition would be strong enough to then lead to, okay, I'm gonna leave my tech stack, applied this one point solution or this multiple point solution that this founder, this startup has, and the price point is reasonable, we're good, and ARR chugs along in its very own way, right? I think today, and I'll reference LPL and Anthropic in a moment, but I'm pausing because that value proposition has to be immaculate. It has to be well thought out. It also has to have deep pockets of capital that then start to signal they have what it takes, value prop, people want what they have, they've got the right leadership, they've got the right amount of capital going to the right places to then disrupt the places where these big companies — and I'm a big fan of LPL being, you know, in Southern California growing up, LPL was always a big, you know — but what LPL did in signing a deal with Anthropic, overnight they became every founder's competitor, right? But they already have 30,000 advisors or so that are used to plugging into what they have, used to doing things the way that it's done, the culture's there, you don't have to break up, you don't have to do anything, it's all there for you, right? And by the way, I think the solutions, maybe they're not there yet, but if you got the moat of data that an LPL or a large firm — LPL is what we're talking about, but I mean, think about all the big firms that have all this data — they apply it the right way with the right technology partner like Anthropic, it's going to get really sophisticated, really fast. And it's going to continue to make that divide bigger on what it takes for a founder looking to disrupt some things, right? To then get those users, those advisors to move over. So that's interesting. And as I look back over the weekend on the ones we've invested in, they're going to have a bumpier ride, but I'm really bullish still on what they've designed and then how they're applying AI as well to increase their efficiency and scale. So I still feel really good about them, but boy, going forward, on new ones, candidates that come to the Founder's Chair saying, can we be included in one of the eight so we can be in front of your group? It's gonna be, I think a lot has changed since two and a half years ago.

Paul Tyler (29:52) Well, yeah, and just to put an underscore on that, I think Claude Code, you know, we'll kind of get into this with Anthropic. Unbelievable, right? I mean, this is enabling a lot of people to build things you never could have imagined. So I think it's going to create a lot of noise. And you think about this, if I have — I can tell you, James, the email inbounds I get from people saying, I got this great system for doing a video. I've got a great system for doing the following. I don't know them. What's their proof point? I think the value I think you're going to bring is actually going to go up higher because the people around that room can actually open the doors to give them a chance for a pilot, give them a chance for real feedback, build them, have a chance to get some success where I think we're going to have a lot of people coming at this thing. But what's going to distinguish them from the thousand other people doing startups? And then now let's transition over to the next one. Incumbents who are taking opportunities to do this. So talk to me about LPL. I saw the press release. James, I have to, this is so hard to keep up with. It is so hard. So talk to me about LPL and Anthropic. Tell people what's happened and I want to hear your perspective.

James (31:03) I know. Well, yeah, so a lot will still kind of come out over the next couple of weeks, right, of what the solutions are. But started with Hazel, right, and Jason Wink and releasing Hazel, their AI bot, and how capable they were of having Hazel review tax returns and tax forms and to aggregate that information in a good way for an advisor. But it's got so many other capabilities, right? You look at LPL saying, gosh, we would like the same thing. Do we build internally or do we outsource it? And so they went with Claude and Anthropic. So I think they're just a really neat marriage where they're going to create products and solutions for their user base, which is one of the biggest advisor base out there. And I think it's going to be unlimited what they can do. For instance, we saw a startup focus on this and they started getting traction. Well, in the past, Paul, I would say that they have an opportunity to acquire that firm, bring it in-house, and get them to coalesce with their technology, but that could take a long time. Or they say, hey, Anthropic, help me build out something that's solving this piece, but specific for our customer base, specific for our advisors. And so that can be rolled out across the country, right? So I think the story's yet to be fully written there. But the idea though is innovation is one thing, but then execution has always been important. But now execution's handled at a breakneck speed by folks who don't sleep, folks who don't take vacation. And now arguably you can build that out at a much cheaper price point. It's interesting to go through what that means for the LPL, but my guess is it's going to retain a ton, but also make them in better standing with all their advisors because they're keeping up with what the changes are and what the needs are of their advisors.

Paul Tyler (33:19) Well, I'm telling you, it's going to rip through every challenge, every business. I think anybody in business and financial services who think this won't have an impact, they're wrong. I think to your point, how fast, where, and who do you think has the lead and can fumble? Because employing this stuff is tough. I think it's change management. What do you do now with people you've hired? How do you train them to use that? Who's going to be defensive inside an organization? To date me, I remember when I just started my career, all the debates ran. I remember the debates, James, about should we have a website? That's when I started my job. This was in the mid-90s at a consulting firm. I talked to the consulting people and said, look, we should have an internet strategy. Paul, open source will never work, it's all closed. Really? So today I see history repeating itself. Well, I'm the AI champion, and I've got this. The bigger the organization, yes, it's easy. LPL signs a contract, boom, deploys. Is it a tool, is it how much and how many people will they touch inside that organization? I'm going to tell you, putting Anthropic in, that's like table stakes. Now get people to use it, train them, right? You know that with advisors. This is hard. It's going to be an interesting journey.

James (34:59) Yeah. Well, you know, and let me kind of go back on, you know, the Founder's Chair for a moment, right? I think there's a role that founders will be really paying attention to that AI, you know, exists now where they can quietly build, Paul, right? And build and build and because you can put things into market, you know, hypothetically by, you know, testing it through the AI, right? And kicking out what makes sense in the market. I think what's gonna be interesting is they may push off raises for a little bit while they build quietly. And in order — I think the smart ones understand that you can't come with just a pilot when you want investment. You can't come to the table and share with your user base that you want them to leave somewhere to come join you and pay you 10 bucks a month or whatnot. You can't do that without having big logos. I think it calls for...

Paul Tyler (35:55) Yeah, let's talk — yeah, so like, you talked about that room, it's great, you know, we hosted it here at Zinnia's headquarters. Doors are shut, you got all the funders and what are they saying? Yeah, like, spend a little time on that one. Like.

James (36:07) Yes, we did. Yeah. Yeah, so I think the call for a strong cap table, the call for users already there enjoying the experience is going to make that founder much more valuable no matter when they go raise, right? Whether they quietly build and put off raise for later or they want to go and say, I'm ready to really get after it and $7, $10 million, I can deploy that right away. Having the ex-operators in the room validate that problem is real, an agent, agency, carrier, or IMO will pay for it, and then putting their own contacts in front of that company to be used. I think that's all very valuable. So when you shine that spotlight on where there's opportunity, I think getting those people in the room, having that validation, getting them to join you is a really big signal to the companies, even the carriers of technology like Zinnia and others, and carriers that say, they're coming with industry folks who know what's going on and they're heavily backed and they're smart and strategic around when they're gonna raise and so we can see a path for that, right? And so, you know, on the flip side though, I think the funders are gonna just wanna have more fun because I think they're gonna have a really neat time because I think we're gonna see some really good growth. And so having them experience the room, be a part of it, you know, I think will be interesting but specifically for the room, so our next one's coming up in August, right? I've deliberately went out to distribution heads and made it heavier in that world than in getting the funders to represent the venture or even carrier executives. We'll still have those definitely sprinkled in. I love those perspectives, because they challenge the entrepreneurs and the ex-operators. But I want distribution there because they react real time because guess what? When you're running an agency, those agents call you because A, you want them to, right? But B, they will complain about what's happened and what they did. And I have a feeling that they're gonna get turned off by AI because they're gonna go sign up with these companies that say, we're gonna build an agent for you and it's gonna handle all this, this, this, this, and all of a sudden there's gonna be some potential risk of what they share and expose with a third party vendor that wasn't vetted. But they love that $12 price point, or $100 for a year, and they fed all this information and got nothing. So we've got to be careful about that as an industry to make sure we've got the right people doing the right things. And I think that room starts to vet that out and push people in a good way so we can get to that conclusion.

Paul Tyler (38:45) Right. Yeah, all right. Well, okay, so August, anybody who's listening should do this. And can you disclose how much money you've raised for the 17 startups in total?

James (39:08) Yeah, so mind you, we don't raise, right? Because it's pure angel investment money. So you got to make a decision saying out of the eight that I saw, I wanna do one and this is what I wanna do, right? So it's so different, right? And when you think about it from that regard, it's prying every dollar and every cent out from someone's pocket. It's not, hey, James has a couple million to deploy and I need to convince James and his team, right? Not that at all. That's what I think makes it really special. Because five will turn on their interest light, you know, they're presenting, 10 will say it's not for me, right? Then they start focusing on it. So overall, right, what we've seen, and we still are working on several deals, the deal window after an event is 30 to 60 days, you start to get capital, right? They get organized and they start coming through. But out of the 17, a little over 11 million was deployed from direct angel, right? And then another 2 million on follow-on where they said, let's double down, let's keep going because we like the early traction they showed us already, so let's give another check to them. But from there, you got several people joining boards, advisory boards or statutory boards. You've got affiliate programs happening because they want access into the networks of these people in the room. They've got customer base that they started signing up, so it's well beyond just the check that they get. It's all the other things that they get to do by being in front of the right people, and leveraged to have 15 to 20 of those types of conversations at each event.

Paul Tyler (40:34) This is great. Listen, first of all, I want to thank you because I think what you're doing is tremendous. We've had a lot of innovation, I'd say, in the insurance space, but it's been like great industries, property and casualty, love it, commercial property and casualty. But finally, you've kind of put all the pieces together for our business. So listen, thank you. It was great hosting you here. I think your August event is going to sound terrific. Everybody should want to be there. Hopefully you got a few requests coming off of this podcast. What's the best way for people to connect with you, connect with Founder's Chair, maybe apply? Who knows? Write checks? Yeah.

James (41:16) Yep, very easy. Coming back to your piece, we do have a website, right? We think that's important. So the website's thefounderschair.com, right? My email, james@thefounderschair.com. Those are the easy ones to connect with us on, whether you're a founder or a funder looking to be in that room that we talked about. I think it's a really great thing. And even leading up to that, we will have a conversation around if this even is the right time if you're a founder, right? And so there's virtually nobody that we've selected that didn't ask that question, James, is this the right time? How much should I raise? So those are normal. On the funder side, is there an obligation to deploy capital? Absolutely not, but there's an obligation that you will bring your insights. Honest, direct, that's what our group loves. And so we get excited whenever someone says, I think I wanna be in that room and see and support what that next wave of innovation looks like because they're coming and sitting on a mountain of data, mountain of experiences themselves. So, you know, I've always enjoyed getting on these podcasts, Paul, and talking to you. You know, we probably scratched the surface on a few things, but boy, was it fun. So thanks for having me.

Paul Tyler (42:27) Yeah, great. James, hey, thanks so much. Thanks for our listeners. Hopefully, you'll share this with all your friends. And most importantly, come back next week for another great episode of the L&A Hub.

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