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The seed plan converts CoverVector's current founder-led product and paid broker pilot into a production platform, repeatable broker deployments, initial carrier adoption, and a body of underwriting outcome data. Over 18 months, the company will establish the product, commercial, data, team, and revenue proof required for a strong Series A. CoverVector earns through licensing and usage and does not pursue placement commissions or compete with brokers for the client relationship.
Starting position: a paid Top-10 broker pilot, active discussions with specialty brokers, carriers, and enterprises, a live VectorIQ engine, and a patent-pending architecture. Deployment, usage and collection assumptions are management targets tested through the slower-adoption case in §7.
| Investment area | Amount | What it funds |
|---|---|---|
| Product, engineering and AI/data | $2.30M | Production platform, evidence intake, deployment workflow, scoring infrastructure and data pipelines |
| Insurance product and commercialization | $1.05M | Broker deployments, carrier pilots, underwriting workflow and evidence development |
| Trust, legal and company infrastructure | $0.95M | Security, data handling, contracts, finance and operating infrastructure |
| Founder compensation and contingency | $0.70M | Below-market founder compensation and an 8% contingency for timing and execution variance |
| Total | $5.00M |
| Role | Timing | Ownership transferred from the founder |
|---|---|---|
| Founding Product Engineer | M0 | Core platform architecture and engineering execution (term-sheet ready) |
| Insurance / UW Evidence Lead | M0–6 | Underwriting logic, evidence standards and carrier workflow (term-sheet ready) |
| Product Designer / Workflow UX | M2–4 | Broker and carrier workflow design |
| Applied AI / Data Engineer | M6 | Evidence intake, extraction and data pipeline |
| GTM / Broker–Carrier Partnerships | M12 | Qualification, pilot conversion and deployment expansion |
| Trust, Security & Compliance | M12 | Security readiness, data handling and enterprise controls |
Hiring follows operating proof. If a milestone slips, the associated role and discretionary spend are deferred, preserving the contingency.
The base plan funds the Month 18 proof set. If additional capital becomes available, CoverVector can pull forward selected capabilities otherwise planned for the next financing period:
Incremental capital would improve product readiness, reduce technical execution risk, and reduce the product and data work left for the Series A to fund. The Month 18 deployment and revenue commitments would remain unchanged.
| Period | What gets built | Commercial proof | Team |
|---|---|---|---|
| M0–6 | Productize the current engine and broker workflow into a deployment layer with one reusable record schema | First broker deployment supporting live renewal work; first paid records | Founding engineer; UW evidence lead; product designer |
| M6–12 | Repeatable deployment layer, PulseIQ monitoring, and the first carrier workflow | Two broker deployments, first carrier pilot, 200 assessments, first outcome records | AI/data engineer |
| M12–18 | Harden the platform to carrier grade, reduce founder production, expand deployment capacity | 6–8 broker deployments and 2–3 carrier deployments or paid pilots; $2.5–4.0M signed recurring contract value | Commercial lead; trust & security |
The initial commercial wedge is helping brokers prepare and position AI-exposed accounts for placement and renewal using an underwriting-grade AI risk record. Carrier underwriting adoption expands from the same evidence architecture. During the seed period, VectorIQ and the broker workflow remain the commercial center; broader product depth, portfolio capabilities, and direct enterprise distribution follow after the core motion is proven.
Brokers license at $150K per year plus $49 per record; carriers license at $250K per year plus $59 per record. Each license includes a proposed minimum of 300 records per month per deployment, to be validated through initial contracting. Direct company pricing remains a secondary channel and is detailed in the appendix. Pricing is benchmarked to available market comparables in Appendix A2.
Recognized revenue reflects deployment timing and in-year ramp. Exit run-rate reflects year-end deployments operating at full modeled volume. Year 3 assumes completion of the Series A and the additional team and deployment capacity it funds. The seed plan is underwritten through the Month 18 proof set. Detail is provided in Appendix A4–A5.
CoverVector is building underwriting infrastructure for the market, not a brokerage or placement business. The company does not compete for commissions, control placements, or replace the broker's client relationship. Brokers use CoverVector to prepare and position accounts; carriers use an independently governed underwriting view. CoverVector earns through platform licensing and usage.
Broker-built tools are naturally associated with broker advocacy. Carrier-built tools reflect the carrier's own appetite. CoverVector can support permissioned, decision-specific views across companies, brokers, and carriers without participating in the underlying transaction.
Neutrality creates access and trust. Defensibility develops through workflow integration, reusable structured records, evidence history, and bound outcomes accumulated under appropriate data rights.
| Seed-stage question | Proof required for Series A |
|---|---|
| Can the product operate without founder-led production? | Production platform and a repeatable deployment process |
| Will paid pilots convert into software licenses? | Signed deployments, contracted usage minimums, explicit pilot conversion criteria |
| Will brokers use it in real placement and renewal workflows? | 6–8 licensed broker deployments |
| Will carriers use the record in underwriting decisions? | 2–3 carrier deployments or paid pilots with defined license-conversion criteria |
| Does usage create proprietary, useful data? | 750–1,000 unique bound-and-tracked underwriting records |
| Is the commercial model repeatable? | $2.5–4.0M signed recurring contract value plus qualified pipeline |
| Can the company scale beyond the founder? | Product, insurance, data, commercial and trust roles operating independently |
Series A preparation begins around Month 12, with the financing process expected to launch around Month 15 and target a close around Month 18. Series A capital expands the proven broker motion, deepens carrier integrations, accelerates outcome-data accumulation, and funds portfolio and claims-calibration capabilities.
Through Month 18, the base case models approximately $7.1M of cash operating spend ($5.6M of operating expense plus ~$1.5M of delivery costs and channel share), funded by the $5.0M seed and approximately $8.0M of customer collections, leaving approximately $6.0M of cash at M18 after a mid-plan trough of approximately $2.9M at M12. The slower-adoption case leaves approximately $2.0M. Signed recurring contract value is the committed annualized value in place at M18; cumulative collections include platform, usage, assessments, monitoring, and pilots received throughout the period.
| Metric | Base plan | Slower-adoption case |
|---|---|---|
| M18 broker deployments | 6–8 | 3–4 |
| M18 carrier deployments / paid pilots | 2–3 | 1–2 |
| Signed recurring contract value | $2.5–4.0M | ~$1.8M |
| M18 cash balance | ~$6.0M | ~$2.0M |
| Runway if Series A is delayed | Near breakeven | ~11 months |
| Runway if all collections stop at M18 | ~15 months | ~6 months |
| Series A timing | M15–18 | ~M21–24 |
If the Series A is delayed, hiring is frozen and discretionary spend is trimmed; the hold plan credits only contracted minimum usage on the frozen book, so usage above minimums is upside to these figures. Under that hold plan, the base case is near cash-flow breakeven and the slower-adoption case has approximately 11 months of runway. The zero-collections stress is the conservative floor: approximately 15 months in the base case and approximately 6 months in the slower-adoption case. Platform and monitoring are modeled as invoiced annually in advance, with usage collected on net-60 terms in the base case and net-90 terms in the slower-adoption case. The base and slower-adoption cases do not indicate an immediate bridge requirement under the stated assumptions.
The company sees the inside-out view and owns its record; the broker's product is advocacy (make the risk placeable); the carrier's product is adjudication (decide whether to bind capital). The carrier's premium price buys three carrier-only capabilities and full independence from the broker's advocacy view. Engine internals are gated from everyone.
| # | Capability | Company | Broker | Carrier |
|---|---|---|---|---|
| 1 | AI Risk Record, canonical account file | |||
| 2 | AI Risk Score + 5-driver profile | |||
| 3 | Evidence grading (5-tier confidence bands) | |||
| 4 | Claims scenarios mapped to 15 coverage lines | |||
| 5 | Remediation roadmap (prioritized) | · | ||
| 6 | Coverage map + placement positioning + wording issues | · | · | |
| 7 | Underwriter question bank + evidence schedule | · | ||
| 8 | 2-page underwriting memo | · | · | |
| 9 | Traceability chains + interaction-effect audit | · | · | |
| 10 | Portfolio comparison + accumulation view | · | · | |
| Capabilities included | 5 | 6 | 8 |
| Comparable | Price point | Source type | Why it anchors |
|---|---|---|---|
| Cat models (RMS / Verisk) | ~$539K/yr per peril model | Published public-entity contract (Citizens FL) | $250K carrier license is under half one cat-model contract |
| Agency systems (Applied / Vertafore) | ~$150–230/user/mo | Estimated from published reseller/user pricing | $150K broker license fits within existing practice software spend |
| FICO | $4.95/score + $33 at funding | Published (mortgage channel, 2025) | per-decision pricing paid by the risk-bearer |
| SecurityScorecard / BitSight | ~$20K per monitored company/yr | Estimated from market reporting | anchors the $699 assessment + $1,999/yr monitoring tier |
| CyberCube (broker tooling) | ~$100K/yr | Estimated, single-line cyber analytics | broker license priced comparably while spanning more lines |
Pricing is benchmarked to available market comparables; estimated figures are labeled as such and are not verified public prices. The structural anchor is the category itself: the risk-bearer is the primary payer, and both sides pay because each receives a different gated product.
Risk Signal Record: every submission processed through VectorIQ inside a deployment; the billable unit at $49/$59 (24,000 events modeled in Year 1). Canonical AI Risk Record: one reusable record per unique commercial account; signals resolve to one account. Underwriting-Grade Record: a canonical record attached to a bound placement with outcome data captured; the M18 data gate counts these.
Funnel to 750–1,000: Year-1 carrier flow (6,000 post-triage submissions × a 50–70% quote rate × an 18–25% quote-to-bind ratio) yields an estimated 540–1,050 bound accounts and can cover most or all of the gate; broker-side outcome capture (3–6% early capture on 18,000 records × 85–90% book retention) adds ~460–970. After resolving signals to unique accounts (~75% factor), ~750–1,500 unique bound-and-tracked accounts are available before counting any M13–18 flow. Sources: quote-to-bind 18–25% published by OIP Insurtech (2024, industry average, varies by line); triage and retention figures are industry estimates; capture and dedup rates are management assumptions.
| Basis | Year 1 | Year 2 | Year 3 |
|---|---|---|---|
| Exit run-rate (year-end deployments × full modeled volume) | $3.4M | $28.7M | $128.8M |
| Recognized (deployments ramp; prepaid terms earned ratably) | $1.80M | $20.0M | $88.0M |
| Billings (invoiced; Year 1 headline basis) | $2.05M | $21.8M | · |
| Bridge metric | M12 | M18 | M24 |
|---|---|---|---|
| Signed deployments (broker / carrier) | 2 / 1 | 7 / 3 | 8 / 6 |
| Fully-ramped equivalents | 3.0 | 8.0 | 14.0 |
| Exit-month billable signal records | 4,000 | 16,400 | 27,400 |
| Signed recurring contract value | $1.12M | $3.67M | $5.39M |
| LTM revenue (billed basis) | $2.05M | $10.4M | $21.8M |
| Licensing run-rate if modeled volumes hold | $3.0M | $14.5M | $19.9M |
The base deployment bridge assumes sufficient broker and carrier license conversions to generate $2.5–4.0M of signed recurring contract value from platform subscriptions and contracted usage minimums. Paid carrier pilots may satisfy the carrier-adoption proof but are excluded from signed recurring value; the revenue gate must be met independently through executed licenses. Signed value is ~25% of the M18 licensing run-rate; the gap is variable usage upside that is modeled but never claimed as committed. On the Year-3 run-rate, ~41% of revenue is contracted and subscription-based, ~57% variable repeat usage, ~2% transactional.
| Year 1 | Year 2 | Year 3 | |
|---|---|---|---|
| Blended gross margin (on recognized revenue) | 84.6% | 83.5% | 83.4% |
| Licensing | 83.7% | 91.4% | 93.6% |
| Monitoring · gross / contribution after channel share | ~99% / ~99% | ~99% / 59% | ~99% / 60% |
| Assessment & advisory | 81% | 82% | 80% |
COGS inputs are operating estimates to be validated against pilot actuals: $1.82 compute + data per signal record (derived from model calls, tokens, third-party data and retry rates), $0.50 sampled human QA per record, $150 review per underwriting-grade record, $35K implementation per deployment, $15 per monitored account per year, and a 50% first-year channel revenue share on channel-sold monitoring whose accounting treatment (commission, COGS or contra-revenue) will be settled in contracting. Founder delivery hours are tracked in opex during the seed period. Direct delivery labor will migrate into COGS as standardized delivery ownership transfers to the team, and margins will be validated against pilot actuals. Cash conventions: platform and monitoring bill annually in advance; usage collects net-60; the slower-adoption case assumes net-90.
All figures are derived from CoverVector's internal v10 operating model and use consistent definitions across the base and slower-adoption cases. Terms are used consistently and never blended: signed recurring contract value (platform subscriptions + contracted usage minimums), billings (invoiced), recognized revenue (earned as delivered, prepaid terms ratable), cash collections, and exit run-rate (year-end deployment count × full modeled volume). The base and slower-adoption cases use identical definitions and the same quarterly cash structure. Year 1 platform fees bill at 75% of list at go-live as a first-year discount and are recognized ratably.
