61–70 of 101 posts
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Yeah, they raise a massive round on traction from other YC companies then need to find the real Product Market Fit (enterprise and others) after that round. It's actually very inefficient
yc circular funding scam
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Corgi is even worse than just circular revenue, their entire insurance business is a house of cards: https://reticulating.substack.com/p/ycombinators-corgi-insur...
Thanks for the article, I assume you are the author. I think the main question about Corgi is: are they underpricing risk so severely that they go bust? And honestly, we have no idea. For all we know startups are buying overpriced insurance from Corgi because they have a better brand and are easier to deal with than Berkshire's army of underwriters. Though it's also worth noting that the main reasons startups buy ins…
Yes, insurance is mostly a box ticking exercise for most startups. My concern with Corgi is that even after accounting for how unimportant insurance is to startups, they are so blasé about their underwriting that for the small number of startups that will eventually need the protection insurance offers, there is a substantial amount of exposure to Corgi going under.
A typical startup needs D&O insurance to satisfy their investors -> the startup approaches Corgi -> Corgi's sales team negotiate more comprehensive insurance that covers many more of the risks that the startup faces that would not be insurable by traditional underwriting -> the startup uses their insurance coverage to justify risk taking.
Historically, the type of risks startups took were of little legal consequence but that has changed with AI. The social and political appetite for taking down AI companies is only getting stronger. We're already seeing OpenAI and Character.AI subject to multiple lawsuits over teenage user suicide.
All it takes is a single large judgement against a single Corgi insured company to liquidate the whole Risk Retention Group and then any ongoing litigation that Corgi was covering, is suddenly uncovered, and uninsurable elsewhere. The potential fallout from a startup losing coverage mid-litigation could be substantial when that litigation is government sponsored, the corporate veil isn't very useful when a government is looking to make an example of a company.
Multiple Corgi customers are already involved in expensive litigation and while I believe that is not covered by their Corgi policies because it predates Corgi's launch, it is a sign that expensive litigation is well within the realms of possibility for their customers.
Earlier quoted context omitted.
Yeah, they raise a massive round on traction from other YC companies then need to find the real Product Market Fit (enterprise and others) after that round. It's actually very inefficient
yc circular funding scam
that's why every mayor vc firm has one datalake, one cdn, etc etc.
they know their investment will go to these, why not keep it in their own ecosystem by some verticalization?
...the absurdity with Ai is when even competitors join in
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It's the YC playbook. I guess it works, Corgi for example a "AI" insurance company with like only 5 real engineers and a bunch of growth people. Their main customer is other startups mostly YC. Same with Delve.
Corgi is even worse than just circular revenue, their entire insurance business is a house of cards: https://reticulating.substack.com/p/ycombinators-corgi-insur...
UH OH
If you go through the most recent YC batches, it's insane how much of their "customer list" is just other companies in the same or recent batches
love the humor
Earlier quoted context omitted.
It's the YC playbook. I guess it works, Corgi for example a "AI" insurance company with like only 5 real engineers and a bunch of growth people. Their main customer is other startups mostly YC. Same with Delve.
Corgi is even worse than just circular revenue, their entire insurance business is a house of cards: https://reticulating.substack.com/p/ycombinators-corgi-insur...
Did you write in more detail about that threat somewhere?
A sent 10K to B, B sent 10K to A, where is 10K coming from? and if it's a circle then how would you report higher revenue..
And once you go through enough hops and convince the world that this thing which your company happens to be pioneering will forever change the world and everyone will use it the money circle isn't even relevant because the entire goal was to make your stock prices skyrocket and now you're valued at ridiculous levels!
Just make sure to get out of it all before any Investor actually wants to see real profit being made.
Earlier quoted context omitted.
Thanks for the article, I assume you are the author. I think the main question about Corgi is: are they underpricing risk so severely that they go bust? And honestly, we have no idea. For all we know startups are buying overpriced insurance from Corgi because they have a better brand and are easier to deal with than Berkshire's army of underwriters. Though it's also worth noting that the main reasons startups buy ins…
Yes, I am the author. Yes, insurance is mostly a box ticking exercise for most startups. My concern with Corgi is that even after accounting for how unimportant insurance is to startups, they are so blasé about their underwriting that for the small number of startups that will eventually need the protection insurance offers, there is a substantial amount of exposure to Corgi going under. A typical startup needs D&O i…
They found a way to sidestep regulations in a non-traditional way, they're using AI for underwriting, but like I said, there's no actual evidence the underwriting is wrong.
Is a startup gets insurance for something they couldn't get insurance for elsewhere and then Corgi goes belly up, the startup is our their premiums but otherwise in the same place.
For all we know, there are multiple risk groups under the hood for different risk types/profiles to insulate mispricing of different policy types.
Honestly, I feel like startups don't buy insurance at all unless customers ask, there's just nothing meaningful there to insure. If you fuck up that badly you're probably just going to go out of business even if the insurance check comes through.
I agree that insurers definitely faces the urge to underprice risk because the shoe will drop later, but there's no actual evidence here that they're mispricing risk of that people buying it really think it's going to save them if they do something risky.