This another example of what is called the Master-Slave dialectic from Hegel, an 18th century philosopher. Something that I studied in a philosophy class and had a profound influence on my understanding of work. Please take 10' to understand it and it applies to the relationship between engineers and salespeople, to the relationship now between China and the USA.
https://en.wikipedia.org/wiki/Master%E2%80%93slave_dialectic
For me it makes total sense to tax Google, Facebook and all others. Why not? What do you to lose? Parking your IP in some remote country, be it Ireland or Turks and Caicos, is fine until you realize that the IP protection is not as bullet proof as you thought. And please don't come to California to sue to protect your IP. I still can't believe that none of those companies are paying Federal nor state taxes. For now. Well, they do pay some insanely low taxes.
This has absolutely nothing to do with IP but everything to do with the delivery of services which are free, supplemented by advertising income accounted for abroad where it can not be taxed by the country where the service was delivered.
Looked at in a different way: if Google was a paid for service you could levy sales tax on that service.
But Google earns it's money from selling ads. If they are selling those ads to business in EU, the mechanics (and taxation) seem to be the same as (for example) a US graphic design company selling logo design services to businesses in EU.
What exactly is new here? Is it just the size (and wealth) of Google and similar companies that has encouraged the governments to try to take a larger slice of pie?
Companies are always going to find ways to avoid taxes and privatize more profits to fewer and fewer individuals. It's the responsibility of the government to find those loopholes and get them to pay a fair share to maintain the society they exploit for that profit.
Yes, taxes are related to IP of course. Parking your IP in a country where you have a super low tax rate guarantees paying no or very little taxes using transfer pricing shenanigans back to your home office.
We were in the same situation 4 years ago for our computer vision company, same team size. We targeted the wrong industry (beauty) and that was a mistake. Lessons to be learned and plenty of contacts for you as we went through the process of an acquisition. PM me, I am easy to find.
Technically this is not a new entrant, just a different way to recycle capital. Munich Re (one of the top three reinsurers in the world) will provide reinsurance/capital to Vouch or anybody who could bring growth to them.
The post is a bit misleading. A lot of startups in that field use the standard bashing of “middlemen”, “making the process more efficient”, etc when in fact they are just another broker. Just about EVERY startup in that field uses the same language (Lemonade, MetroMile, etc…).
An analogy would be emails: you can go directly to Gmail, Yahoo or whatever or you may access all those emails on your Mac Mail or whatever . What matters is the provider behind (their tech, spam capabilities, etc.)
Vouch is an agent of Standard Insurance, not really a top player in the field of insuring tech. Chubb and Hartford are.
This is public information. The fact that they are licensed surplus lines brokers is a flag as they may place your business with “non-admitted insurers” instead of established insurers in your state (who have experienced claims people, insurance wording approved in your state, and backed by state guarantees). “Non admited insurers” is an opaque field of various insurers, some are good, some are just shabby. Just be aware.
Most of the time you will be better off with admitted insurers (Hartford, State Farm, Chubb) for a number of reasons: they have the experience, they pay claims promptly, and are cheaper. The state will keep an eye on them if they don’t pay claims promptly.
I assume that Vouch will also farm out the claim process to contractors. I just don’t know.
I am not saying that Vouch is good or bad, just be aware, don’t buy into the BS and be an informed buyer.
Buying from a mid-size insurance broker provides some piece of mind: they know what they are doing, have the equivalent of a large enterprise team dealing with big, publicly traded tech companies, and they can call on those in house folks to help if needed or if you have a claim that the insurance company “initially” denied. They can apply “gentle pressure” because they have buying power.
Of course if you deal with Vouch, an agent of Standard Insurance, your options are limited if you get in trouble.
You may think “I will sue them”. You don’t sue insurance companies, or very rarely (and only if you are a consumer, not a company) because they have in house counsels they pay $50/hr against your $1,000/hr lawyers.
1. It's State National, not sure where you got "Standard" from.
2. Vouch is acting an MGA/Program Administrator, including being involved in underlying insurance product/actuarial design. This is WAY different than being a regular broker/agent. (It's essentially the difference between sales, and sales and operations.)
3.State National doesn't have a reputation for anything--that's what makes them a fronting carrier! Besides providing the paper/AM Best Rating/filing assistance they are not involved in the day to day.
4. Being Surplus Lines Licensed is not a red flag; if they want to offer (possibly in the future) additional options for hard to place risks, then it's being used appropriately. If they are using it just to be able to offer "something" when they know, say, Hiscox would be happy to cover them, then I'm not enthused.
5. Having only a few licensed producers on stuff is not unusual for now; they may be sharing staff with a partner/TPA, plus they may have a large inhouse underwriting team. With so many coverages being offered though, they do need a larger staff than normal to be proficient.
6. It's quite likely that being focused on a narrow class means they can be more responsive/flexible and better able to price risk. I assure you the Hartford does not care at all about the VC funded tech startup market. Program business can be very lucrative AND beneficial to those being covered. Some brokers (large or small) have NO IDEA how to handle tech startups; if Vouch proves itself they may eventually try to place business with Vouch.
7. Some insight in how they will handle claims would be good, I agree--ESPECIALLY for D&O and E&O where legal assistance is critical (and specialized). Being able to offer/get your filings approved for many different coverages is only a piece of the puzzle...you need experienced people on the claims side, irrespective of the bare ability to "pay claims". The fact they don't even discuss claims handling on their site makes me sad :-(
8. Oh, insurance companies get sued all the time for denying claims, not that you want to be in that position...
Thanks for the clarification. Sorry about sounding cynical, that was not the intend. I have just seen a lot of BS over the years and I super careful trying to understand what is behind that smokescreen.
Good luck with the venture!
A good IP / trademark lawyer will cost $1,000/hr BUT no lawyer will meet you for an hour. They don't have any answer, need to do some research that is why they will ask for a $50K retainer. And at the end you will be $50K poorer. Sure they will send a "scary letter" to the offending party, blabla, but don't fall in that trap. You will get nothing.
Thank you @andybak, you made my day. Truly admirable document! This is the highest concentration of BS I have ever seen. I have to check who was the VP Marketing and CEO of Pepsi were at the time. They deserve a place in history for having bought that pipedream.
Look for signals.
Pretty simple: the caliber of the CEO, CTO or the caliber and experience of the VP Eng.
Then look at the VC's funding the company, and the names of the partners on the board. If top tier VC (say Sequoia, Benchmark, or A16) invested in series A after having invested in seed, then you are good. VC's can be be wrong for sure but they have done a ton of background checks on founders, the tech, why customers would buy, etc..
There is no way you can do as much and have as many contacts.
Ignore vanity signs such as "Fancy Advisors", they bring next to nothing. Same for "Fancy Big Client", just a free test on some ancillary product.
Good luck
In general this is good advice. However I would advice against depending too much on VCs. They don’t really get it right a lot of the time. At the end of the day it is the caliber of the team, the sales/customer acquisition strategy and the competitive dynamics of the market and the position of the company within this market. So the first part about judging the team is valid. The answers below about asking questions about sales/acquisition is very good. Depending on the stage of the company, you should also ask about profitability or if there is a clear path to profitability.
Also don’t shy away from asking challenging questions...such as competitors etc. and be wary of a CEO who is dismissive of challenges. You should get a well thought out answer.
