Beware of the “straight line assumption” when you hear impressive founder success stories.
In hindsight, it looks like a pretty straight line through “We started it, then we grew it, then we sold it.”
But it was never a straight line.
It’s messy with some occasional upward stair steps when things go better than average.
1000 mistakes and tries that didn’t work, with a small number that worked very well—some good and some bad luck, too.
Aaron Steffey is the co-founder and co-CEO of Propeller Bonds, an online platform that enables insurance agents and brokers to issue surety bonds instantly — without the lengthy paperwork or back-and-forth typically involved in bonding.
Aaron was an insurance agent, and his co-founder cousin, Chris, was a surety bond underwriter when they set out to revolutionize the way surety bonds are bought and sold in 2019.
They initially bootstrapped with a software development partner who accepted equity instead of fees. Their first version drastically simplified the process of buying and selling surety bonds in the digital world, allowing them to grow quickly.
They raised $7 million in SAFE notes from strategic partners to accelerate growth in 2021 and grew to nearly $20 million in revenue.
They sold 100% of the company to Arch Capital in a strategic acquisition in early 2024.
Sounds like a straight line from startup to successful sale in 5 years, but it was the opposite. As Aaron describes it this week on my podcast:
“My biggest advice for startup founders is simply just that endurance wins. It’s the whole thing of getting back up after you’re knocked down, like everyone says. I had to live that so many times. “So many No’s when it came to our first carrier pulling out. No, I don’t want to invest. No, I don’t want to use your surety product.
“There were so many times when I wanted to give up. And the same with my cousin. Had we not founded the company together, I don’t know that we would have continued because there were probably times when I would have given up.
“As long as both of us weren’t on the floor, one of us would just pick the other up when the other person usually was more sane, and we dragged each other along.
“A successful founder needs to have a pretty high pain tolerance and endurance to succeed. You just have to keep pushing forward. It just sounds so cliche, but that’s what it was for us.”
I appreciate founders like Aaron, who share glimpses of their brutal journey and the things they learned the hard way. Not just the ups.
In this episode, Aaron also talks about:
- How this sleepy, paper-based market changed quickly in COVID
- Why they raised growth funding from strategic investors and not VCs
- Why they sold the company and are leading the business after the sale
Check out this revealing interview with Aaron Steffey on the Practical Founders Podcast.
