The Founder Mutual Insurance Pool (FMIP) is how seed founders join the Rising Tide pool, the world's first mutual insurance pool for startup equity. You insure up to 10% of the equity in your startup for a flat annual premium. If your company fails, you receive a contractual cash payout. And because it's a mutual, you're not a customer, you're an owner: you hold dividend shares in one pool alongside every founder we insure, employees at Series B to E companies, and GPs insuring their carry in late-stage winners. Their steadier outcomes are what make it possible to insure seed founders at all, and the seed winners' upside, shared through a life-long dividend stream, is what makes the pool compound for everyone.
A founder is, almost by definition, equity rich and cash poor. Your net worth is a number on a cap table that won't pay a mortgage, sitting inside a single company at the riskiest stage of its life. On the other hand, your investors hold a diversified portfolio, and your employees can leave. You carry concentrated, illiquid, all-or-nothing risk, and you carry it alone. The math is unforgiving: more than 60% of seed-stage startups never return capital.1
Surgeons insure their hands; airlines insure their planes; your landlord insures the building. Your equity is the single most valuable thing you own, and nobody would write you an insurance policy, because seed risk on its own is the hardest insurance there is to write: most companies fail, and the failures come first. So we don't insure founders on their own. We pool your equity with steadier, later-stage risk and put a real floor under your downside. With that weight off your chest, you can afford to swing bigger, and hit harder.
Same founder and company. The only difference is whether a slice of equity was insured on day one.
| Going it alone | Insured, $1M face in the FMIP | |
|---|---|---|
| Median outcome, 40 years* | $0. Most seed startups never return capital. | ~$4.4M. Failure payouts, mutual dividends, and pool shares, net of premiums. |
| If the company fails | You absorb 100% of the loss. | A contractual $500K payout, in cash over five years, or as pool shares if you want more dividend upside. |
| Who's behind you | Nobody. The downside is yours alone. | One pool of founders, employees and GPs, built so the late-stage members' steadier years carry the seed claims. |
| Liquidity before exit | None. Illiquid for 10+ years, then a discounted secondary if you're lucky. | Borrow against your policy, like whole-life insurance, and that doesn't go away if your startup has failed. |
| Your shares | Yours. | Still yours. Every share, every vote, QSBS intact.2 |
Your equity is the single most valuable thing you own, and nobody would write you an insurance policy. Until now.
You get dividend rights in the pool in proportion to the equity you insure: the same dividend share every employee and GP in the pool holds. The mutual then pays out surplus profit to its owners annually, for life.3 This is a century-old structure used by the whole-life mutual insurance industry, so it's tried and true.
Where the money comes from, for the average founder insuring $1M of equity:*
Means, so components add exactly. Uninsured: mean ~$1.2M, median $0. † Average across all insured founders. Most never claim; a failed founder receives the full $0.50M per $1M insured.
Contractual payouts, and borrowing against a policy, might sound strange for a venture capital product. But a carrier making contractual payouts, writing policy loans, and paying dividends to its mutual members is not a novel instrument. It's the same structure as whole life insurance, a century-old product still writing billions in premium every year today. What's new is only what we insure: startup equity instead of life.
A mutual pool is evergreen by construction and scales to thousands of members, exactly the diversification across companies, across stages, and across decades that venture's power-law math demands. That said, the trade is real: this is not a lottery ticket. It's a floor under your worst-case outcome, and a compounding, lifelong dividend stream.
The FMIP model runs seed-stage outcomes on the same calibration as our other founder products: a 65% failure rate and a power-law tail exponent of α = 2.42, from Othman's analysis of AngelList early-stage data (2019) and the follow-up study of 10,665 LP portfolios (Koh & Othman, 2020), inside one blended pool with the EMIP and GPMIP books. Two hundred simulated pool paths, a fixed seed, a 40-year horizon.*
Why the pool includes employees and GPs. Seed failures come early and in clusters, and seed winners take the better part of a decade to pay. Employees at Series B to E companies and GP carry in late-stage winners fail less often and exit sooner, so their premiums and proceeds pay claims while the seed book matures. Run as one, the pool needs about 2.9× less worst-case cash than the same three books run as separate pools, and its loss ratio runs around 0.17. How the pool works.
Why it matters to you. A parachute is only worth what the pool behind it can pay. Blending makes the pool behind yours sturdier, and larger: in the model it ends year 40 about 36% larger than the three books would be run apart.
We don't publish a public simulator for the FMIP. The model, its calibration, and its assumptions are available to founders we're underwriting; ask us to walk you through it on a call.
Of the ~10,000-15,000 seed rounds raised in the US each year, we expect to only underwrite and insure the top 5 to 10%, sourced through the top accelerators, VC firms, and founder communities that filter hardest. Being insurable is a strong positive signal, to you and your future investors.
Insure at pre-seed or seed, when you have the most equity and the least cash. If you're covering a team rather than yourself, we built something for that too, in the same pool.
Up to 10% of your founder stake, for a flat premium of $5K per $1M insured, per year, paid until your company exits or fails.
You receive a contractual payout of 50% of the insured face ($500K per $1M insured), paid in cash over three to five years, or you can elect to take it as extra dividend shares in the pool for more long-term upside.
No. You insure via a forward contract on the insured slice's future exit proceeds. No shares change hands on day one, there is no day-one tax bill, your QSBS clock keeps running, and the pool never appears on your cap table or in your governance. Tax and QSBS treatment vary by individual; consult your advisors.
One dividend share per $1M insured, held for life: the same share every employee and GP in the pool holds. The mutual pool pays surplus profit to its members annually, so every member's win funds dividends to everyone. Dividends are paid from surplus and are not fixed obligations.
Employees at Series B to E companies, covered through the EMIP, and venture GPs insuring a slice of their carry in late-stage winners, through the GPMIP. Their steadier outcomes make seed founders insurable, and seed founders' winners lift everyone's dividends.
Pre-seed and seed-stage founders. We expect to underwrite and insure the top 5 to 10% of US seed rounds each year, sourced through the top accelerators, VC firms, and founder communities.
Insure at pre-seed or seed, when you have the most equity and the least cash.
* Illustrative and hypothetical. Not a forecast, guarantee, or offer. Figures are Monte-Carlo output for an FMIP member of the blended Rising Tide pool (the FMIP, EMIP and GPMIP books on one balance sheet) at the model's default parameters (200 paths; Othman-calibrated seed outcomes: 65% failure rate, α = 2.42): median insured-founder outcome ≈4.4× insured face, mean ≈4.7×, versus a $0 median and ≈1.2× mean uninsured, over a 40-year horizon, net of premiums, including failure payouts, mutual dividends (≈$2.85M per $1M insured), reinvested claim shares, and residual pool-share value. Pool-level: the blended pool's worst-case cash need (95th percentile of paths) is about 2.9× lower than the same three books run as separate pools, and its loss ratio is ≈0.17. Model verified 23 October 2026. Sources: Othman (AngelList, 2019); Koh & Othman (2020).
† Average across all insured founders; most never claim. A failed founder receives the full $0.50M per $1M insured.
1 Seed-stage failure rate based on AngelList early-stage venture data (Othman, AngelList, 2019) and corroborating research. Failure definitions and sample populations vary across studies; the cited figure represents the proportion of seed-stage companies that do not return invested capital.
2 Tax and QSBS treatment are not guaranteed and vary by individual circumstances. Model figures use simplified illustrative tax assumptions (20% on a zero basis). Consult your own tax and legal advisors.
3 Dividends are paid only from pool surplus and are not fixed obligations. Payouts, dividends, and pool values are model outputs and targets, not promises.
4 All terms are indicative and subject to final policy terms, underwriting, and regulatory approvals. The FMIP, EMIP and GPMIP are in structuring as a single mutual pool; no insurance policy or security is offered hereby, and no regulatory approval has been sought or obtained. Rising Tide Management LLP.