Helping Tech Startups Find Insurance is the Mission of Lumen Insurance Technologies

David Perez, founder of Lumen Insurance Technologies, courtesy photo.

By LAURA LOREK
Publisher of Silicon Hills News

Launching a startup involves all kinds of paperwork and technical details that can bog down an entrepreneur.

Gabe Wilcox, founder of MineralSoft, an automated revenue management system for mineral rights, not only had to deal with bringing his idea to life but the nitty gritty details of paperwork.

Early on, Wilcox turned to David Perez, founder of Lumen Insurance Technologies, for advice on what insurance policies he needed.

“I think David has really slotted in from the get go as more of an advisor to us,” Wilcox said.

In 2016, MineralSoft began working with Perez and Lumen Insurance and at every stage of the company’s growth, Perez has been able to advise Wilcox on the kinds of policies the company needs like directors and officers’ liability Insurance, general liability and commercial property insurance.

“It let me focus on the core business stuff,” Wilcox said. “David is someone we can trust.”

Perez launched his startup, Lumen Insurance, based at Galvanize in downtown Austin, two years ago. He caters exclusively to technology startups companies.

One of the clients that inspired him to start his company was Honest Dollar, which later sold to Goldman Sachs.

“David understands the constraints startups have,” said David Cardona, who worked as general counsel at Honest Dollar and is now working on another stealth startup.

In the beginning, Honest Dollar didn’t have revenue, had raised a seed stage funding round and needed a lot of basic insurance like general liability, workers compensation, and cyber liability, Cardona said.

“We needed quite a bit of stuff,” he said. “We wanted one resource that could help us get the best quotes. Dave was good at finding us policies at a low cost that we could afford.”

Perez also got to know a small startup at the time, Opcity, which had offices at Galvanize. Opcity only had a handful of employees when Perez began working with them. Today, the company has more than 270 employees and has leased an entire office building.

Other clients include Hanger Technology, Student Loan Genius, Telestax, SchoolLinks, Olono and others.

For Perez, the startup is born out of his mission to be of service to others. A Houston Native, Perez graduated from Texas A&M where he served in the Corp of Cadets, a student military organization. He comes from a family with a military background. His dad served in the Army in Korea and both grandfathers served in WWII. The horrific terrorist attacks of 9/11 happened when Perez was in college and that spurred him to join the Air Force after graduation. He served six and a half years in the Air Force stationed in California and Wyoming.

In Wyoming, he was a nuclear weapons operator at a missile alert facility. He later earned his MBA at Colorado State University.

When Perez left the Air Force in 2010, he returned to Texas. He had married his college sweetheart, Bethany, who was also from Texas. They had family in the insurance industry. His uncle was an insurance underwriter and his father in law was an agent. He went to work for a small regional firm headquartered in Austin that only targeted companies that had revenue of $10 million and up.

“I felt like working for the middle market there – we couldn’t bring clients on unless they were a certain size,” Perez said. “It was a little bit more of a mismatch with my general network and the opportunity for their growth. I had a bunch of friends who were starting technology companies. That was not a target market for us.”

But Perez started getting opportunities to work with tech companies and that’s when he launched Lumen Insurance in 2016.

“I’m investing my time and energy in people when most of the other folks – especially the big firms – they are not going to touch anybody until they are paying $100K in premiums,” Perez said.

His main competition comes from online firms, but he doesn’t have a lot of local competition for the startup business, he said.

This year, Lumen is looking to do business with tech companies in Austin, San Antonio and throughout Central Texas. He also plans to build his team and bring more people on in Texas. Lumen Insurance has clients in San Antonio, Dallas, and the United Kingdom and Australia.

Startups need insurance during the formation, funding, expansion and high growth stages, Perez said.

“I’m not going to sell someone something they don’t need or don’t want,” Perez said. He’s all about developing long-term relationships with the entrepreneurs he invests his time in.

“I want to take care of people,” he said. “I was in the service because I want to serve others.”

Perez is very much a facilitator in the Austin startup community, Cardona said.

“He likes to bring people together to make connections,” he said. “It’s not really about him getting business, but it’s about helping people meet each other and expand their network.”

Perez chose to locate his startup at Galvanize because of the opportunity to network with others and the buzz around the coworking environment and the startups based there. He also likes where Galvanize has its other campuses: Boulder, Denver, New York, Seattle. He wants to be in the tech hubs when he scales Lumen Insurance nationally, he said.

Lumen Insurance is like the David to the Goliath tech insurance companies, Perez said. There are better-funded resources and organizations out there, but they are not going to send someone from on high to deal with startups, Perez said.

“I see things through a different lens,” Perez said. “When people start their company, I want to be a part of their team from the beginning.”

Perez chose the name Lumen because it’s all about shedding light on what is going on in the insurance business for emerging technology startups. He wants to be helpful and to educate tech startups and be a resource for them throughout their journey.

“We help them see things that are beneficial for their business,” Perez said.

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