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Published · transcript-backedSpeaker unverified: belief
26 Jun 2025 · 55:41 The Peel Inside the $2 Trillion Employee Benefits Market | Ryan Sachtjen, Threeflow
“What are the levers that we need like how could we you know do that across like a handful of carriers and be successful there. And I think what that allowed for for Rick and I to do is one, establish a relationship and level of trust pretty early.”
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- 26 Jun 2025 · 55:41
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…ing that separation was really important. So, how do you do that? Like if I'm a group of co-founders, we maybe have a we're going through a similar situation where one founder needs to really focus on something outside of the business. They're still committed, but like it's something it's something like this, like a family member, wife, partner has cancer. H how did was there like a certain process that you guys went through or like a structure of doing it conversations? Like how do you even bring that up to like everyone? as we reflect on kind of what how we focused on it. I think one part was being really clear about areas of focus was helpful. And so I knew that okay this is the thing that when I can like I can really be intentional about focusing on. And the second was, you know, we we were pretty open about the communications on a very fast cadence and they knew what was happening and it because it would change, you know, week over week as far as how much I could focus on this versus that cuz she might go through a period where she's feeling really good and maybe you're like working from home in the in the kitchen with her or whatever or like she's on the couch and you're on on a table beside working or whatever and you can feel a little fluid with it. Yeah, that's right. And so just I think that I don't think there's a magic in it. I don't think there's like a beautiful process you do. I think making sure that you're like really open and honest about like what are the needs in that moment. And I think being really clear about the areas of focus, those are the two bits that are critical. And if you can do that well, then I think there's an area where like if you are, you know, in this moment and you're trying to support a co-founder that's going through it, helping be intentional to tell them, I got this bit and like remove that mental load from them and just have them focus on maybe an area that they're really really good at intentionally and just like all this other like we got it like we'll take care of it. I know that previously you were doing these things but like we'll take that but we need you to do this bit. Maybe it's a technical co-founder and I just need you to be focused on these things when you can. That's helpful too, you know, in terms of the clarity. So like limit the scope of what you're doing. Just focus this thing that like when you make your co-founding team, you're like we're all good at these things. Just like just the things that you know you're good at, just do those that you should probably do anyways. But I think being even more critical and even more disciplined about like what's the most narrow thing that I can have this person, you know, focused on in that moment I think is really helpful. And then you mentioned so the fund raise I know so Rick Zulo who introduced us I think he he's was your first investor first like big like led the seed round. Y how did the the fund raise go like meeting him convincing him to invest or him convincing you to let him invest? Like what was that whole process? Because I know it's like it was a non-traditional situation that that went down there. Totally. him convincing him to invest or him convincing you to let him invest? Like what was that whole process? Because I know it's like it was a non-traditional situation that that went down there. Totally. I mean, I think first off, we didn't I didn't know what I was doing at all. Like, did you know you wanted to fund raise or We knew that we wanted we knew that we needed to raise some money. We had previously done a friends and family kind of round and so it was the classic pass the hat and we we felt good about all of those that contributed in the friends and family were all insurance people. So brokers and carriers that like felt this problem. So that was like we liked that bit. But there was this after you done some of your like customer discovery conversations. So people were like, "Oh, these guys seem like they know what we're what we want and maybe they'll make it." I mean, a lot of them we had personal relationships with. So like, look, if I'm going to make a bet on a team, I'm going to make a bet on Rich and Ryan, and I'm going to give you guys 25 grand or whatever the number was. And so we got to a point where we knew that we needed to put a little bit more gas in the tank. We needed was like to hire some people to help teams. and we had been working with, you know, like classic like contractors and like just being scrappy. We didn't have anyone like actually on staff. And so we I got introduced to Rick through another sort of friend in in Chicago. And at that time when we first met, we were not actively fundraising. Okay. It was a we were starting to think about it, but not an intentional like I'm going to run a process. I didn't even know what that freight like I didn't know that that was the thing of like here's how it goes and here's the process he ran and so Rick and I had an opportunity to meet each other and ended up setting up time together on like a monthly cadence where we would riff on marketplace dynamics something I've always found to be fascinating whether it's insurance or other industries of just how do marketplaces work what are the dynamics of it what are the levers and motivators and so we found ourselves talking about that and then applying ing it to the big thing that we were thinking about which was introducing the carrier side into our product and then incorporating that into the economics of the business. So the product that was the pure broker product had was kind of there when you start and so the thing that we but we were at that time our revenue was exclusively from the broker side. Soass and so it was relatively uninteresting and we knew that we wanted to flip this to be supply sidef funded eventually but we had not done that. So a lot of the discussion that that we had was about how do we want to do that? What does that look like? What are the levers that we need like how could we you know do that across like a handful of carriers and be successful there. And I think what that allowed for for Rick and I to do is one, establish a relationship and level of trust pretty early. And then what I actually didn't really know at the time was all of the work that he was doing to get equal like spun up and get to do is one, establish a relationship and level of trust pretty early. And then what I actually didn't really know at the time was all of the work that he was doing to get equal like spun up and get the fund like in place and raised. So you just thought he was some like VC billionaire guy who was just like going to write you some give you some money and you'd be off to the races? Well, I knew that they were starting a fund. I didn't know the exact composition of like what was happening about them closing on that fund at the time. Okay. And then we I learned that later sort of in the process where they at the same time that we were doing our fund raise. So now at this point we're actively talking to venture investors y equal and others and then that's when we he had shared they were actively like working to get their fund closed and so there was there was this moment where we were both very dependent on each other in terms of I'm looking to you know to obviously help fund the business and he as part of like getting the fund closed of course is talking about their ability to go deal you find fine deal flow and all of that stuff. Y and even though we we did get to the point where we had you know we had three other term sheets that we were looking at other than other than Rick and Equal and it at that point it was a pretty easy decision of like who we wanted to partner with even though there were others that had slightly different deal terms and things like that. And so I think what that allowed for us to do is a have trust that there are these other options and like I'm we're like choosing intentionally to be to be partners together. And I think it established this like openness and honesty that we've had ever since of just hey here's what's up over here. Here's what I'm dealing with. I know that you've got like your stuff you're chasing down. I think it's we can go farther together. And I think that was sort of the one of the foundational pieces of it. and he he then introduced us into Joe Floyd who's at Merchants Capital. They ended up leading our A and so it helped then us establish the relationship with uh with Joe and team and part of the you know we we never really ran a super formal process all the way through is it just sort of helped like drive business forward and establishing the capital partners that could help support the growth of the business. And I and I think Rick mentioned that you you were kind of like helping him you talked to his LPS and they were like d using you to kind of diligence Rick. Yeah. So and you were probably like let's go guys like give Rick the money. I want I want some money. Give it to him so I can Yeah. It it was there was a fun dynamic. But yeah, it was but part of the deal, you know, when it's kind of like it just it's a deep partnership, you know, when you're thinking about, you know, a venture investor, it's, you know, it is a it's a proposition that is has a long tail on it in terms of timeline and yeah, I don't know, maybe it's a reflection on stuff that happened with me personally and things like that, but like that just matters so much to me and I know with Shahhee and Rich, my co-founders, like…
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