Distributed Ventures: Delivering Acceleration & Realisation
Distributed Ventures is on a mission: to find, fund, and collaborate with visionary entrepreneurs, while combining the powerful vantage point of its strategic LPs, e.g., diversified insurance broker NFP. Shawn Ellis, Managing Partner of Distributed Ventures and operator of its venture investing team says "Across our Partner group, we've all operated in various capacities ourselves. We've been in companies from a very early stage to very mature, and we've seen a variety of relevant fact patterns as a result."
In addition to its human capital, Distributed Ventures' strategy of targeting very early-stage companies is another one of its differentiators. "We like to work with companies in the early innings of their journey. We'll target late seed and Series A investments and, in collaboration with our strategic LPs, help to materially accelerate our portfolio companies’ momentum. It’s highly unusual to collaborate as closely as we do with our strategic LPs in support of our portfolio companies. This DNA is embedded in our fund, given that the investment team at Distributed Ventures spun from NFP Ventures, our prior fund, with the full support of NFP. This early partnership with NFP has been a key source of differentiation and advantage, and NFP has been a terrific partner to position Distributed Ventures for success for years to come."
"Because of our strong perspective and subject matter expertise rooted in distribution, we help companies with their go-to-market strategies, value propositions, bundling and pricing models. We also help accelerate their businesses quicker and become more successful. The breadth of agility that we apply in support of our portfolio companies is really unique. We built the blueprint – with how we tap into strategic support from our LPs – in our prior fund, NFP Ventures."
After spinning out, Distributed Ventures’ anchor LP remains NFP, a large, diversified and successful insurance broker with a large employer benefits consulting business.
Harnessing The Power of Strategic LPs
Distributed Ventures’ true differentiation comes from the subject matter expertise it taps from its LPs, who are there from the beginning, offering expertise to help optimise potential.
"We engage our LP network throughout the lifespan of a deal. Starting with identifying attractive opportunities as we're going through due diligence. We very quickly tap into the subject matter expertise we have within our ranks. Tthen, after we make an investment, we sit down with the company and establish a natural distribution strategy. What are their goals? How can we help them achieve then exceed them? We help them think even bigger by integrating them with functional leaders and teams that are forward-leaning across their organizations in various disciplines.
"Our LPs are often aware of these companies and technologies because they've already been part of the evaluation process and have spoken with them. We also have the good fortune to have colleagues who are happy to lean in and really shape the future of this industry, working closely with these organizations.
"We're now raising our second fund, and welcoming capital from institutional partners beyond NFP. It’s exciting to build on the strategic muscle NFP has brought in a distribution context and layer in diverse, complementary contacts from insurance carrier partners, from other brokerage players in the industry and traditional institutional investors. We're really excited about our fund two and growing the innovation that we can accelerate in the market.
"We're growing our team as we raise our next fund, and excited about the next stable of portfolio companies we'll be working with and are already having conversations with a number of companies - - so we'll have exciting news to share in the early days."
Partnerships Built for the Long Haul
Empowered by subject matter expertise, internally and through partnerships, gives Distributed Ventures an edge, allowing them to better see where the industry is going and to hear the customer and market’s voice.
“We're living in a high-velocity venture market. It's easy to err toward a transactional approach as people tend to work on autopilot. We really like to know our partners. We work closely with them and are supportive. In terms of economics, even speaking to the way we structure our investments, often there's a component where we're helping companies while earning the right to invest more in them by accelerating their businesses, which really matter to founding teams and their other investors.
“It's this notion of finding a balance, understanding value creation and having a long-term view in terms of the partnership. We build partnerships that are durable and hope to work with founders across multiple businesses and ventures.”
Ascend is the first end-to-end platform within the insurance industry that provides automated all-in-one payments, premium financing, collections, and payables. Selling to brokers, carriers, MGAs, and digital native insurtech companies, Ascend condenses the flow of funds timeline improving policy retention, increasing revenue, and moving money (ie commission/premium) more quickly.
“Ascend is rebuilding critical payment infrastructure that has largely remained untouched for the last several decades. As they look to accelerate progress well beyond incremental improvements, Distributed Ventures is helping Ascend enhance the payment experience and bring efficiency to the back-end reconciliation process amongst brokers and carriers. Equipped with a dynamic founding team and strong set of investors, we look forward to continuing to support Ascend as they transform the industry."
TrustLayer’s insurance management platform allows companies to automate the verification of insurance, licences, and compliance documents. The company has developed technology to streamline the collection, management and review process through one integrated offering, enabling companies to reduce error-prone manual compliance tasks and quickly identify issues related to noncompliance. TrustLayer’s multi-channel approach to distribution includes selling directly to enterprises (B2B) and leveraging channel partnerships (B2B2B), including brokerages and associations. Trustlayer leverages powerful network effects to grow distribution organically, i.e., Vendors and their brokers validating insurance through the platform become top of the funnel leads for TrustLayer to pursue.
”TrustLayer is a great example of Distributed Ventures’ ability to invest in very attractive companies that also bear significant strategic relevance to our limited partners. With TrustLayer, connectivity to our investor base has not only helped galvanise conviction for investment but also help us secure a significant allocation in a competitive fundraising process," says Ellis.
Relay is a SaaS platform equipping brokers, wholesalers, and their capacity providers with the leading white-labelled electronic placement solution in both P&C insurance and facultative reinsurance. With exceptional support for mid-market and large commercial lines of business, Relay delivers client-winning proposals supported by best-in-class instant API-based and email quoting capabilities.
Distributed Ventures invested in Relay Platform about two years ago, after getting to know Greg Boutin, the founder, and has since developed a strong relationship. "We really liked Greg’s approach to the market and how he was thinking about bringing efficiency to risk placements in a way we hadn't seen. I've been a director for the company over the course of this time, working very closely with Greg as he's finding product-market fit for various offerings of Relay, accelerating the business and growing his team. One exciting value-add we bring is helping these organisations find the best talent and continue to feed it - ahead of their human capital needs so it's not just financing helping them grow, but also the right perspectives and cultural alignments,” says Ellis.