Key Person Tech Star - Equity Funded Start-Up
A 53-year-old technology star located in Silicon Valley, CA.
A renowned technology executive had accepted $75 million to build an organization to create an instant messaging platform for use by financial options traders. Furthermore, he was provided an additional $25 million of funding, should it be warranted. Serving as the CEO/CTO of the firm, the start-up’s success rested solely on his shoulders, prompting the board to require key person insurance.
In the technology sector, it is acknowledged that those who have mastered the code drive the success of an organization. In this case, not only did the CEO/CTO intimately understand the code required to make the organization successful, he also maintained deep relationships with those funding his organization. In addition, he maintained a close connection to those who would ultimately serve as key clients to the firm. For these reasons, he was deemed an irreplaceable element in the company’s success.
Exceptional Risk Advisors designed a $50 million key-person disability insurance policy, payable to the company in a lump sum after 18 months should the CEO/CTO became permanently disabled.
With a reasonable level of key person disability insurance protection now in place, the board could rest easy knowing the start-up was protected if the CEO/CTO were permanently disabled.