No Priors · Sep 24, 2026 · 43m · 28m saved
With Michael Lee, Co-Founder and CEO of Sequence Holdings
A commercial loan at BankSouth, a Georgia community bank, used to take 30 days from application to close. Six months after Sequence Holdings invested, Michael Lee said, it takes 11, and consumer underwriting has fallen by 94%.
Most AI companies sell tools to existing businesses. Lee's firm buys stakes in the businesses themselves, puts its own engineers inside them and plans to hold them permanently. Its latest target is the insurance broker Baldwin.
"What we do is scarce. We're trying to do one deal per year. That's it."
Michael Lee, co-founder and CEO of Sequence Holdings, on No Priors with Sarah Guo, ran private investments at Lone Pine Capital after stints at Goldman Sachs and Apollo, and has just agreed to take Baldwin private with Michael Dell's family office in what Guo called the largest AI take-private to date, at $7.7 billion.
The full interview is covered here so you can skip it. 43 minutes of audio, 15 minutes of reading.
Here are the 15 lessons that matter.
Key Takeaways
Consumer underwriting at BankSouth has fallen 94% since Sequence invested in March
Loan volume doubled from Q1 to Q2 and the bank took all of it with a smaller underwriting team
Incumbents can't rebuild themselves with in-house teams, consultants or software, he said
Consultants are paid to stay, and software is sold to the workflow as it exists today
A company's "celebrated persona" decides who it can hire: at Blackstone it is the investor, at Sequence the engineer
The regulated nature of a bank helped rather than hurt, because its rules and data are well defined
Insurance brokers are hard for startups to attack: the carrier pays the broker and retention runs at 90%
80% of any business is the same software problem, he said, and only 20% is specific to its industry
Private equity's three-year exit plan is the wrong time frame for rebuilding a company around AI
Sequence aims for one deal a year and would be happy doing none
1. The Baldwin Take-Private
Sarah Guo opened by noting that Sequence had just announced the largest AI take-private to date, buying the insurance broker Baldwin with the Dell family office for $7.7 billion. She described Sequence as a permanent holding company that works with management teams to buy and "refound" their businesses as AI leaders.
Baldwin was the one broker that fit
Lee said Sequence was started 20 months ago to pair strong businesses and management teams with its own engineering team. Brokerage has been a focus since the start, and Sequence met dozens of insurance brokers before choosing Baldwin.
"We've met dozens of insurance brokers and Baldwin was truly N of one of all the insurance brokers that we've met." — Michael Lee
He said he had spent much of the last few months with CEO Trevor Baldwin and his team.
