I Became An Insurance CEO The Same Week Brian Was Assassinated
On Anonymous Founders, Startup Realities, and the Guarantor Industry
For those of you who can’t tell by my profile picture and name, this account is anonymous. Sol Hando, originally a loose pun on Han Solo, started as one of those internet names you pick as a child and somehow sticks as your default pseudonym for decades.
In real life, I run a startup in NYC focused on the housing sector, spending about 95% of my time grinding on that. During evenings and weekends (when I have the time), I’ll read classics or write for this blog. By outside standards, my life might seem boring, but I genuinely enjoy the grind of building something that’s truly my own. Despite the 12+ hour workdays, I’m very happy.
I haven’t written about my startup before, partly because I know I’m someone with occasionally controversial—or at least contrarian—ideas. Especially online, where contrarianism is almost an art form, I’ll play devil’s advocate to push a discussion or test an argument. I’ll even make claims or argue for things I in no way believe (not in a trolling way though), typically to try and illicit and intelligent response from a person I agree with. But, from an outsider’s perspective, playing the Devil’s Advocate and being The Devil can look indistinguishable.
This is one reason I use a pseudonym. I want people to engage with my ideas without my identity—personal or professional—clouding the discussion. I also want to protect my work and reputation from bad-faith actors who might selectively misrepresent my views to harm me or my business if for some reason they find my online presence distasteful.
But why am I mentioning this? Well, today I’m going to talk about my company, which isn’t something I normally do. That said, I know the internet has conditioned us to be skeptical of anonymous claims, especially from people talking about success. Forums like r/startups are prime examples of why this skepticism exists. Posts claiming elaborate achievements—selling a company for eight figures, for instance—are often followed a few weeks later by the same account asking questions in r/SaaS about how to build a website. The reality is, there are far more anonymous accounts roleplaying as successful founders than actual founders sharing honest insights.
In short, it’s completely justified to be skeptical or even to accuse anonymous posters of lying when they claim business success or authority. Even people using their real names often exaggerate—or outright fabricate—their accomplishments. Typically, their motivations fall into a few categories:
They’re trying to sell you something now.
They’re laying the groundwork to sell something later.
They’re trying to raise money under false pretenses.
Or, they’re roleplaying success they see as unlikely to achieve themselves.
I’ll continue to remain anonymous, so take what I say with a grain of salt. This isn’t a plea for belief or validation; it’s simply a recognition of context. If anything about my story seems implausible, assume I’ve exaggerated—but leave me the benefit of the doubt. At the end of the day, I write this Substack for myself, not for you. If you don’t like what I say, feel free to ignore me.
Founding My Prop-Tech Startup
In 2019, I founded a small startup focused on student housing in New York City with a few college buddies. We saw some early success, but by the time I graduated in 2020, we were dealing with the usual startup challenges. One co-founder left due to interpersonal conflicts, and by 2023, the other had burned out and decided to leave as well.
Left alone for the first time, I faced the difficulty of managing a 50% owner’s exit. Continuing at full scale would have meant navigating messy ownership issues and making raising funds nearly impossible (50% dead equity is a non-starter). Personally, I was also drained from working 12+ hour days only to have major decisions stonewalled. So, I made the tough decision to wind down operations, regroup, and start fresh.
Through a founder community I discovered on Reddit—ironically by sharing my complaints on false founders—I connected with others who shared similar struggles. This group’s barriers to entry kept out the “wantrepreneurs,” creating a space for genuine connection and support.
By mid-2023, I had a decent chunk of cash from the downscaling but no clear plan for what was next. I decided to take a break and do something I’d never really done before: travel abroad. My loose plan was to trek through Europe, the Middle East, and East Asia, staying in hostels and on overnight trains. It was an attempt to reclaim the kind of carefree experiences I’d skipped while running a company and finishing two degrees a year early.
I quickly realized, however, that I’m not built for hostels or trains—or for “spending as little money as humanly possible” while trying to enjoy myself. I respect those who thrive on such adventures, but for me, the trip was more about resetting my mental state than proving I could rough it. Despite the discomforts, I learned a lot, and by the time I returned to New York, I was ready to relaunch the startup with a new name, fresh funding, and a faster pace.
Serendipity played a role, too. Through that Reddit founder community, I connected with an acquaintance of an acquaintance—a successful founder who’d sold his company a few years earlier. By coincidence, we both happened to be in Park City, Utah, at the same time, staying just ten minutes apart. We ended up skiing together for a few days, during which I received extremely valuable advice on which direction to go with the company. By the time I returned to New York, we had partnered to rebrand and expand the company. He contributed capital, I brought what I had left from the wind-down, and we got to work.
Fast forward to today: we’ve spent most of the initial investment, expanded our technology, built a team, and refined our methods. There’s been wasted money, bad decisions, and countless challenges—but we’re cash-flow-positive and growing steadily. If there’s one thing I’ve learned, it’s that building a company is rarely a straight path, but the detours often make the journey worthwhile.
The Guarantor Industry
For years, I’ve had a problem with a very specific aspect of New York City’s housing market: The Guarantor Industry. In my view, this entire sector exists as an unintended consequence of the 2019 Housing Stability and Tenant Protection Act (HSTPA), which banned landlords from accepting security deposits of more than one month’s rent.
At first glance, the law seems reasonable. By limiting deposits, lawmakers hoped to make housing more accessible, especially for low-income tenants, where landlords were asking for multiple months deposit, which was just unaffordable for most. Instead of addressing the risks landlords face which motivated the high deposits—like defaulting tenants and long eviction processes—the law simply shifted those risks elsewhere. With a maximum amount they could accept as a deposit, landlords turned to guarantors to reduce risk: people or companies who agree to pay if a tenant defaults.
Here’s the catch: many landlords in NYC will only accept guarantors who live in-state and meet stringent financial requirements. This effectively excludes students—who don’t have an income—and their parents, who often live out of state. Even when students have guarantors, the process becomes even more convoluted because leases are collective. This means a guarantor has to cover the entire apartment, not just one tenant’s portion. Imagine asking your parents to take financial responsibility for not only you, but also the rent payments of your roommates—people they don’t even know.
For students wanting to live off-campus, the requirements are daunting:
An in-state guarantor
That guarantor must earn 80x the monthly rent (~$160,000 annually)
All roommates must have qualifying guarantors, too
And everyone has to be comfortable guaranteeing the rent for complete strangers
It’s no wonder so many students struggle to find housing.
Ironically, many students and landlords would happily agree to a larger deposit instead of jumping through these hoops, but thanks to the HSTPA, that’s no longer legal. And since NYC’s housing market is so tight, landlords can afford to wait for tenants who meet their requirements, leaving students and similar groups in the lurch.
Ultimately, the guarantor industry has turned what should be a straightforward process into a nightmare for students and renters who would otherwise be willing to pay a larger deposit. It’s a perfect example of how well-meaning policies can backfire, creating new challenges for the very people they’re meant to protect.
Why The Whole Guarantor Industry Is A Scam (IMO)
So here’s where I come in. In my startup, we deal with a large number of students, and we see many of them needing a guarantor at some point or another. I have a personal interest in remedying this unfair guarantor situation, as many of my friends—and I myself—have had to deal with it. We are very good at marketing to students for very little, and I think we can quickly offer a superior alternative (or at least cheaper) to the existing companies.
Fees for a guarantor often run between 70%–90% of a month’s rent (non-refundable), which certainly isn’t cheap. I believe these companies are overcharging by a huge margin, given that the amount they are insuring is not particularly high. To break this down more clearly, let’s look at the numbers.
Warning: MATH (Feel free to skip to the end for a TLDR)
How Risk Premiums Are Supposed to Work
The Risk Premium in insurance is typically the cost of covering potential payouts as a percentage of the total value insured. For guarantors in New York City, the total value insured for a standard lease includes:
11 months of rent (R)
1 month’s deposit (D)
The formula for the total value insured (V) is:
where:
R = Monthly rent,
T = Number of months insured (typically 11, as the first month is paid ahead of time by the tenant),
D = Security deposit (equal to 1 month’s rent).
For example, let’s assume the monthly rent is $1,000:
However, since rent is paid monthly, the average value at risk (A) is lower because the insured amount decreases as the lease progresses. To find the average value at risk over the lease term, we calculate the integral of V(t) from t=0 to t=T, then divide by T:
The value insured at any time t is:
where:
V(t): Value insured at time t,
t: Time in months (0≤t≤11)
The formula for the average value at risk (A) is:
Using the same example, and substituting V(t):
Solving for the average value at risk (A) we get:
The Overpriced Risk Premium
In most insurance industries, the typical annual risk premium is around 5%–10% of the total value insured. But guarantor companies in NYC charge 70%–90% of one month’s rent upfront, which translates to a much higher premium.
Let’s calculate the risk premium (R) for a guarantor fee of $800 on a $1,000/month lease by finding the percent ratio between the Guarantor Fee and the Average Value Insured.
where:
R = The Risk Premium,
F = The Guarantor Fee,
A = Average Value Insured
Solving we get:
This 12.3% risk premium is already double the industry average (assuming the average guarantor fee is on the low end of their stated range), but the reality is even worse due to additional factors that reduce the actual risk for guarantors.
Why the Risk for Guarantors Is Lower Than Advertised
Risk Is Concentrated Later In The Lease Most lease defaults occur later in the lease term, meaning the amount at risk when a default happens is already reduced. This pattern is largely due to how tenants approach their financial obligations:
Initial Stability and Budgeting: At the beginning of a lease, tenants are typically more financially prepared. They’ve paid the first month’s rent and deposit upfront, demonstrating an initial ability to meet the landlord’s requirements. Moreover, tenants usually plan their budgets carefully when signing a lease, ensuring they have the funds to cover at least the early months.
Gradual Financial Strain: As the lease progresses, unexpected financial hardships—such as job loss, medical expenses, or unforeseen life events—are more likely to emerge. These challenges accumulate over time and are less likely to occur at the very start of a lease. If a tenant expected major medical payments, or to lose their job, they would not likely sign a new lease in the first place. Additionally, tenants may exhaust savings buffers they relied on during earlier months.
If the average default occurs at the 9-month mark, the remaining value (Vremaining) insured would be:
\( V_{\text{remaining}} = R \times (T - 9) \)For our $1,000 lease this would be:
\(V_{\text{remaining}} = 1,000 \times (12 - 9) = $3,000 \)This lower exposure should reduce the required premium. If the expected Vremaining is only $3,000, then the insurance premium paid is actually ~27%. For other types of insurance, this high of a premium would be illegal.
Re-Renting Mitigates Losses If a tenant defaults, the landlord is legally obligated to attempt to re-rent the apartment. Assuming the landlord re-rents after 2 months of vacancy, the actual payout by the guarantor is limited to:
\(Payout = R * {\text{Vacancy Period}}\)In this scenario:
\(Payout = 1,000 * 2 = 2,000\)This further lowers the actual cost to guarantors, as even if the default occurred immediately, in most cases they would limit their losses to less than $2,000, rather than the total value of the lease being insured.
International Students Provide Built-In Guarantees International students must submit an I-20 form, which certifies they have sufficient financial resources to study and live in the U.S. This document acts as a pre-vetting tool, reducing the uncertainty (and administrative costs) for guarantors.
The Bottom Line
Guarantor companies charge excessive fees based on inflated risk estimates. If their risk premium was aligned with true market risk, they would have a much lower risk premium (Ffair).
Assuming a 7% premium for our example:
At $455, a guarantor fee would still be profitable but far more reasonable than the $800 currently charged. This of course assumes that the risk premium of 7% is justifiable based on the total amount being insured and the default rate. I would say that it definitely is, at least for the clientele that my company primarily deals with (students and international students). There is of course no way of knowing this without very large amounts of data.
I realize that calling what seems to be the true insurance premium Ffair I am making an implicit value judgement against the existing guarantor companies. The typical response to something that is “unfair” is to want to “make it fair”, usually through government regulation. I think this often has unintended effects (like the HSTPA that has caused this situation in the first place) that serve to harm many while helping some, rather than help society as a whole. Thus, I think the best remedy for this problem is competition. A new guarantor service needs to enter the playing field, with the explicit goal of breaking the Triopoly that currently services the market will be able to undercut the competition on pricing. If the premium’s being charged are far in excess of what the real risk justifies as I claim, then this should be trivial. If I am wrong, then a new competitor into the guarantor market will fail, or at least not bring down the average premium.
The Bottom Line:
Guarantor companies exploit an already tight housing market to charge excessive fees for what is, in reality, a low-risk insurance product. With just a few dominant players, the lack of competition allows these companies to inflate prices far beyond what is justified by the risks they actually face. My goal is to challenge this system by offering students a fairer, more transparent alternative.
My Company Becomes Licensed
In an effort to offer a competing guarantor service, my company and I became licensed as an insurance agent and agency just last week. Coincidentally, this happened shortly after UnitedHealthcare CEO Brian Thompson was executed only a few blocks from where I used to live. Technically, this makes me the CEO of an insurance company during the same week another insurance CEO was assassinated—a fact I find both morbidly amusing and, perhaps, mildly advantageous. After all, if potential competitors believe this industry requires extreme risk tolerance, I may have secured the smallest of competitive advantages.
Of course, we’re just starting out. We only have a handful of employees, no underwriting capabilities (yet), and we’ve never actually sold insurance—but that’s all beside the point! We’ve started with being licensed as an insurance agent for an underwriter, and eventually we’d like to begin to underwrite our own policies. How things unfold from here, particularly in terms of insurance CEO assassinations, is anyone’s guess. While I doubt I’ll end up as a target—since we have no plans to enter health insurance (at least in the short term)—if one day I do find myself on the wrong end of such a risk, you can’t say I didn’t know what I was getting into.
Thank you for reading and I apologize if this essay seemed meandering without any real point. I touched on a lot of things that may only seem tangentially related, so I am unsure how well this comes off to the uninformed reader.
In general, I’ve been considering the advice build in public when thinking about my Startup. It’s something I’ve seen done to great success with other founders, and perhaps this new product we’re offering is a good opportunity for me to duplicate their success. I suppose this post is my first attempt to organize my story and thoughts, and hopefully improve on how I communicate in general.