That was not what Sharp had bargained for when he agreed to fund an innovative little insurance agency. And so Walker and Lortscher (who has since left Heritage Union but has a seat on the board) went on the road. They quickly secured the money they needed through a combination of debt and equity -- and at the last minute, the deal fell apart. They went back out. After 30 meetings, they landed the money they needed, mostly from hedge funds and private equity funds.
So here was Walker, nearly two years after founding Heritage Union, having sold a handful of policies, now needing to buy an insurance company. (He also, as a hedge, founded one, in Arizona; that process turned out to be relatively painless.) He identified an acquisition target: Annuity & Life Reassurance America, domiciled in Connecticut. A purchase agreement was signed. For state regulators to OK such a sale, all sorts of specialized functions had to be in place at the acquiring company. Meaning, Walker had no choice but to maintain a staff of operational folks, compliance people, IT and technical people -- at one point as many as 15 employees, waiting for the deal to be approved by the regulatory powers that be.
THE BELIEVERS
And what about these employees, who signed on for a ride but were perpetually stuck at the curb? Because though Walker is tanned and fit and adventurous -- his idea of fun is scuba diving with hammerhead sharks -- and though he models strength and preaches perseverance in the workplace, and though the offices of Heritage Union are like a gallery for inspirational plaques, at a certain point it isn't only the boss's mindset that is crucial. Walker needed believers. He had them.
Sean Gorenflo, Heritage Union's IT director, is a believer. A close friend of Gorenflo's died in heavy surf off North Carolina saving his young daughter. Surfers grabbed her from his arms, but he went under and drowned. His wife, with the help of friends, went through every file folder in the house looking for the life insurance policy she assumed must be somewhere. It turned out he had none; the only coverage was a limited death benefit from his employer. "It's been very difficult," says Gorenflo. "They're scraping by. She's in the process of returning to work to support her two children. This is not what her husband wanted for her."
Julia Roper, Heritage Union's vice president of operations, has a story as well. She and her brother grew up as "insurance brats," children of an attorney who specialized in estate planning and life insurance. Both worked in their father's firm, she continuing on to a career in life insurance, her brother moving on to other things but mindful of ensuring that his family would be taken care of should he die. Which he did, unexpectedly, at age 52, leaving a wife with a disability that left her unable to work and two college-age children. His term-life policy paid a sizable death benefit.
There are a lot of ways to make mistakes with a large sum of money, especially if you are grieving. "Within two and a half years, she'd gone through every bit of it," says Roper, "and as a result they've really struggled. The kids had to drop out of school for while. I know for a fact that if a product like SalaryShield had been around, my brother would have bought it, and they never would have been in the situation they were in."
Roper joined Heritage Union in 2006, bringing with her a quarter-century of industry experience. Moving to a small, uncertain start-up wasn't something she undertook lightly. "I had built a very successful career, and I wasn't going to risk my reputation for something I didn't really believe in," she says. "This is something worth putting yourself on the line for."
THE THIRD LEG OF THE STOOL
"We founded a holding company and an agency so that we can have licenses to work both on our own paper and on other people's paper." Walker is talking with Jonathan Miller, the CEO, and Danny Ballard, vice president of training and marketing, for Parsonex Capital Management, an Aurora, Colorado, financial services marketing organization. The meeting is a mutual audition that could result in Parsonex agents selling SalaryShield.
"And then we established an Arizona-domiciled life insurance company called Heritage Union Life Insurance, and then we purchased a company called Annuity & Life Reassurance America and merged those two companies within the last year."
What Walker doesn't say is how agonizingly close that crucial acquisition came to not happening -- how his company very nearly died in Year Four. Again, the problem hinged on the bureaucratic barriers to entry -- in this case, the department of insurance in Connecticut, which had to approve the sale. After months of due diligence to vet the company Heritage Union was buying, Walker and his colleagues had to spend another month assembling countless documents required by Connecticut insurance officials. In October 2007, a letter came from Hartford. It said, in the peculiar language of insurance regulators, that the department of insurance was inclined to turn down the purchase. The letter identified a host of reasons, among them a lack of industry experience at Heritage Union.
Walker was at a new nadir of frustration and anger. But he remained unbowed. "It's one of those things you just have to believe can be solved," he says, "because there's no point in believing it can't." He hastily arranged a meeting, a last-ditch effort to correct some misunderstandings and sell the department on Heritage Union's solidity and mission. On November 1, he and his core team, plus two sets of lawyers, met with the department of insurance's general counsel and representatives from the financial and licensing sections.
