Relationships can be messy, including between startup founders and their venture investors. But in a case that takes messy to an extreme, an insurtech company in Santa Monica, Calif. called Sure is alleging that its Series A investor used privileged information to provide to a New York-based startup called Boost that the venture firm incubated and that quickly evolved into a competitor to Sure.

Sure further assets that the venture firm — 29-year-old IA Capital Group of New York — has continued to “harass” Sure over information rights that it is no longer entitled to receive. As for why the firm would bother, Sure’s founder and CEO, Wayne Slavin, suggests that it’s because its growth is outpacing that of Boost. “We’ve grown headcount almost 50% through COVID,” says Slavin. Sure now has annual recurring revenue in the “double digit millions” and is profitable, he adds. Boost, on the other hand, is “losing employees,” he insists. (According to LinkedIn, Boost, founded in 2017, has 30 employees and no job openings; Sure, founded in 2013, has 62 employees and three job openings.)

Andy Lerner, a managing partner with IA Capital who has been with the firm since 1995, disputes Sure’s characterization of events. “It’s very important that we did not invest knowingly in two companies that were direct competitors,” he said earlier today when asked about Sure’s claims.

Alex Maffeo, a former investor with IA Capital Group who sat on Sure’s board before incubating Boost, then leaving venture to become its CEO, said in response to Sure’s claims: “We have no knowledge of the situation between Sure and IA Capital, nor do we receive any information about any of the companies in IA’s portfolio. I haven’t worked at the firm for almost four years now, and Boost has been focused on the same mission to power insurtech startups and other digital distribution partners from the start. We have always and continue to wish Wayne and his team nothing but the best as both of our companies thrive in our respective lanes.”

So what went so awry here? The conflict between the two sides dates back to nearly 2017, when IA Capital led an $8 million Series A round for Sure, writing the company a $2 million check from a fund whose sole limited parter is the insurance giant Prudential.

Lerner says that at the time, Sure was a “mobile insurance distributor,” one that was focused on items in transit, including, “flight insurance, smart phone insurance, baggage insurance.”

Slavin says this is false and asserts that Sure — which sells its software as a service to large companies like Tesla, Intuit, Mastercard, and other customers that subscribe to its software-as-a-service to run their digital insurance programs — had already begun working instead on an embedded insurance API strategy soon after its seed round closed in 2015.

That Boost is also a kind of API platform to be able to sell insurance could be a coincidence, but Slavin doesn’t think so.

On the contary, according to both sides, a rift began to emerge soon after IA Capital, which invests solely in insuretech startups, began working on an internal program called “Project Boost” led by Maffeo.

The original idea, says Slavin, was for this would-be company to offer insurtech companies the capital needed to quickly bring new insurance products to market, and for it to raise $40 million toward this end. When a big round didn’t materialize, IA Capital and Maffeo pivoted and, with seed funding from IA Capital, Maffeo resigned as an investor and joined what became Boost Insurance as CEO.

The problem, says Slavin, is that Boost quickly began to “drift in our lane.”

To Slavin, this was worrisome, given that Maffeo had spent almost a full year on the Sure board and understood its prospects, some of the intricacies of its tech, and what was on its roadmap. It made the only move it could, says Slavin: it decided with its board to invoke a provision of its investment documents with IA Capital that enabled it to stop providing IA Capital with the same level of information to which it was entitled earlier. In fact, in late 2019, it stopped sending IA Capital anything at all.

That hasn’t sat so well with Lerner, who maintains that Sure and Boost “aren’t that similar,” and that, in any case, because “once in a while they overlap,” his firm hopped off the board when Sure closed its Series B round, a $12.5 million financing led by the publicly traded insurance holding company W. R. Berkley.

More, says Lerner, after a “back and forth,” IA Capital agreed to accept a more bare-bones “income statement and balance sheet, so we [could] value and report on Sure to our LPs every quarter. We didn’t ask for any sensitive information or technical information or who its customers are. We basically just wanted financial information to do our audit and value our stake, and Sure said they wanted to send us zero information.”

With some animus on both sides, what happens from here is the biggest question. While Slavin was willing to quietly endure the “nightmare that we’re living and that [IA Capital] just won’t acknowledge,” he says, a surprise letter from IA Capital’s attorneys a few days before Christmas — one that asked for private shareholder information — was going too far, he says. For one thing, earlier this week, he wrote to all of Sure’s shareholders and told them about such these behind-the-scenes wranglings for the first time.

Through Sure’s attorney, Evan Bienstock of Fenwick & West, also told IA Capital that if its own investor, Prudential, wants more information about Sure, Sure is happy to provide it to the insurance giant directly. (Prudential did not respond to a request for comment this afternoon.)

“I probably should have stood up to the bully way sooner,” says Slavin. “But it’s really hard when, as the founder, you know you might need that reference check. You might need that gatekeeper to help you along, even though they’re not necessarily looking out for the interests of the company and the interests of the other shareholders.”

Lerner meanwhile suggests it’s all been a big misunderstanding. Asked why IA Capital hasn’t responded to Sure following its response to the firm’s information request, Lerner said today that IA Capital was “preparing a response to that just two days ago,” and it remains unfinished.

He added that IA Capital wants to “have a great relationship with [Sure]. We regret that there’s a dispute. We just want them to send us the minimal information so we can audit and do our report to our LPs in the future.”

Said Lerner: “I think we’re reasonable, and we wanted to work things out. They’re an insuretech that seems to be doing well, and we’re a large insuretech VC, and we could certainly be helpful to them.”

Asked whether IA Capital couldn’t simply sell its shares to existing shareholders, or let Sure buy them back in order to resolve the situation, Lerner claimed his venture firm would be willing to sell its shares, but he said it would first “need some information to evaluate what’s a fair price.”

Yet Slavin, who says Sure has bumped up against Boost twice to win recent deals, says he doesn’t see how that happens at this point. Too much damage has been done. Besides, he says, “Andy can discern revenue run rates from a financial statement; he can figure out how big our contracts are based on what he’s asking.”

And so it drags on for all parties.

Sure has raised $23.1 million in funding to date, including from Menlo Ventures and ff Venture Capital.

Boost has meanwhile raised $17 million, including from Coatue, Greycroft, and Tusk Venture Partners.

Slavin says that IA Capital owns less than 5% of Sure. Lerner today declined to say how much of Boost that IA Capital owns.