For startup founders in the insurance industry, timing is everything. Whether you're backed by investors or scaling a unique product with breakthrough potential, deciding when to explore acquisition is a pivotal step. For one insurtech president based in Des Moines, Iowa, this decision is front and center and Equity Expansion was brought in to help evaluate the landscape.
After a career that spanned corporate law, insurance administration, and civic leadership, the agency owner launched a startup in 2022 with a clear mission: bridge the growing coverage gaps in homeowners insurance. The product, known as a home deductible gap policy, functions similarly to Aflac but for homeowners.
Two years later, the company is:
With over 1,100 active policies and $500,000 in written premium, the company is still in its early stages, but the infrastructure is built, and the vision is bold: scale to 32,000 policies and break even by the end of 2025.
The president and investors had a specific strategy from the outset: build, validate, and exit the business within three to five years. As discussions with potential acquirers ramped up, including talks with a major insurance carrier and a national distributor, the team began considering all exit paths whether strategic M&A or Insurtech-aligned partnerships.
Key motivators included:
As the founder explained, “We’ve had a few companies tell us, ‘You’ve validated the product’s potential and its distribution flexibility. We don’t need to wait to see profitability we already know what it’s worth to us.’”
Equity Expansion’s typical role is supporting small to mid-sized insurance agencies especially those with $500K–$2M in revenue through the full partnership or M&A process. But in this case, the opportunity was different. This was a pre-profitability insurtech seeking a strategic buyer willing to bet on upside potential rather than trailing earnings.
While the business didn't align with the firm’s traditional acquisition model focused on EBITDA-based transactions, Equity Expansion offered to help in another way: facilitating introductions to innovative buyers with the right appetite.
“Where I think I can help you for no cost and no kickbacks is reconnecting you with strategic groups like End Zone or Lightyear Capital. They’re the kinds of buyers who understand the value of what you’ve built.”
Current acquisition discussions are focused less on traditional multiples and more on:
The startup has also opened a final capital raise of $3.5 million, with $325,000 per unit. The funding will enable accelerated marketing and onboarding of thousands of agents from national carriers like Farmers and American Family whose P&C agents are already eager to offer the gap coverage product to frustrated homeowners.
Other go-to-market channels include:
When Timing and Fit Don’t Align Yet
While this was not a fit for Equity Expansion’s current acquisition partners, the firm offered candid guidance on timing, value, and future alignment. A reconnection was planned for Q4 2025, when the business’s performance metrics could better support the valuation targets.
“This is outside our wheelhouse for now, but let’s stay in touch. If you hit your policy goals by year-end, we may be in a better position to support you through a broader process.”
The Takeaway: Strategic Options at Every Stage
For founders and agency owners navigating the transition from growth to exit, it’s essential to align the timing, value expectations, and partner type. Whether you're ready for a full sale or just exploring what’s next, Equity Expansion can help you understand your options and connect you with the right resources.
Thinking About the Future of Your Agency?
Whether you're leading a fast-growing insurtech or running a family-owned insurance agency, Equity Expansion can help you evaluate strategic options for partnership, growth, or exit. Schedule a confidential consultation today.