When is the Right Time and What are the Right Reasons to Reach out to a Series A VC (w/Andy Lerner, IA Capital Group)

Andrew Lerner is Managing Partner of IA Capital Group, having launched IA Capital's venture capital business which is now the firm’s core activity. Andy is a Director of Credit Sesame, SmartAsset, Matic, and Marble.

Andy notes the VC industry has matured from being the Wild West to become a founder-friendly industry. IA's sweet spot is Series A or five years before the potential sale of a company versus the seed stage where you have to wait ten years or more. The right time to reach out is when your company has $1M revenue or more, are headed towards $2M revenue and are ready to raise a Series A. Once the company's valuation is $100M or more IA feels the fastest growth has already happened. 

Andy relates that full-stack insurers valuations are not what they once were, so partnering with innovative insurtechs help them get farther than their own ideas/tech labs. The majority of insurtechs today either serve or distribute products for insurers and generate the bulk of the innovation being seen across the industry.

Areas of Insurtech investment focus right now include cyber, cannabis and crypto insurance, new market segments where startups have an edge over established companies to gain a foothold in new markets. Andy notes that Fintech is five times as large as Insurtech, so they focus on specific strength areas like payments where they invest din Marqueta, and wealth management like NextCapital and SmartAsset.

Andy also talks about culture: what makes a good fit with the co-founders and overall management team, reviewing how equity is divided and motivation for the founding team. He also talks about a VC can successfully act as a Board member, whether hiring new team members, getting new customers but avoiding the operational side of the business.

Andy holds a B.S.E. in Electrical Engineering and Computer Science from Princeton University and an M.B.A. in Finance from The Wharton School, University of Pennsylvania. He serves as a director of Transportation Alternatives and Chess In The Schools.

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