Congratulation to Team Datalot!

Two Bits of Advice from Datalot’s Acquisition

Founder Collective
4 min readOct 3, 2017


By David Frankel, Partner

Today I’m thrilled to announce that a majority position in Datalot, one of Founder Collective’s very first investments, has been acquired by Lightyear Capital. Terms have not been disclosed, but the transaction represents a win for Founder Collective, and more importantly, for Datalot’s founder Josh Reznick, who is excited to continue leading the company as CEO.

Datalot is a marketplace that connects customers who are shopping for auto, home, health, and life insurance products to insurance agents in real time, improving sales conversion rates while lowering customer acquisition
costs. In doing so, Josh has been exceptionally self-sufficient. Occasionally, he’d ask for a bit of help convincing a candidate to join the team, or he’d ping me for an opinion about a strategic opportunity, but my standard interaction with him was a monthly update showing a remarkably steady uptick in sales and profit. Despite being Josh’s sole investor board member for nearly a decade, I feel a nagging remorse for not helping even more. In ten years Josh has never missed his top line growth numbers, and the compounding effect has been magical.

Datalot team circa 2010 with Founder Josh Reznick (Bottom right).

Funding and M&A announcements are rarely exciting reads for anyone not privy to the transaction, so let me share two bits of advice that I hope may be useful to the entrepreneurs who are reading this.

There is No Substitute for Knowing Your Business

The idea of outsider founders shaking up an industry with bold new thinking is a popular myth in the startup world — it sometimes happens, but in reality, having in-depth knowledge of an industry gives entrepreneurs a huge advantage. Before Datalot, Josh had built and sold another startup called Modern Consumer, which also operated in the marketing lead-gen space.

When it came time to build Datalot, Josh was able to build the product with little outside help. He knew exactly where the bounty was hiding in lead-gen marketing. He knew what the product needed to look like for customers and those working in insurance call centers. Setting up a complex, bespoke PABX phone system was second nature to him.

Datalot shares key information with all employees to make sure everyone knows how the business is progressing.

Beyond the product, he knew how to design a winning organization. Obsessed with metrics, he outfitted every wall in Datalot’s Brooklyn office with huge flat-screen monitors — back when those represented much more significant capex outlays. Josh is a maniacal believer that “what gets measured gets managed” and has made sure everyone in his organization both knows and can explain how the stats relate to the company’s success.

Capital Efficiency is Incredibly Important

While we’re thrilled with the outcome, Datalot will probably not be included in the annals of venture exits. And it doesn’t matter. Because he raised so little capital, Josh owned a large part company at the time of sale and has set his family up for generations. Because Founder Collective has kept our fund sizes deliberately small, the exit is a meaningful return for our LPs. It’s easy to imagine another scenario where the company was pressured to raise more money and the outcome was less exciting, but Josh is an efficient entrepreneur who built an industry-leading business with very little capital.

Datalot HQ is a good reminder that campuses are overrated.

I’ve worked with some founders who lucked into an acquisition or others who relied heavily on the efforts of a seasoned management team to achieve success, but in the case of Datalot, Josh deserves pretty much all the credit. He’s the real deal and a true leader. I’ve been a proud investor for a decade, and I’m thrilled that I’ll continue to work with him (though on the other side of the table with him as an LP in our fund!)

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