Calm Company Fund (formerly Earnest Capital) backs capital-efficient, profitable, software and software-enabled businesses that grow at a sustainable pace and are never dependent on outside capital. In its own words, calm companies 'grow at a sustainable pace, are focused on being profitable, are capital efficient and raise reasonable amounts of capital but are never dependent on it' — explicitly not on a 'unicorn-or-bust' trajectory. The fund looks for 'micro-monopolies': niche, overlooked markets 'big enough to build a real business, but small enough that tech giants and heavily-venture-funded competition won't find it worthwhile to compete,' where a fantastic $25m-250m business can be built by capturing dominant market share. Note: in June 2024 the fund paused new fundraising and investing while keeping its existing portfolio.
A real, specific pain point in a niche or vertical that is still being handled manually, where existing solutions are spreadsheets/email/sticky notes and there is no entrenched tech competitor. The problem should be large enough to anchor a real business but narrow enough to be overlooked by VCs.
“a pain point still being done by hand with spreadsheets, email, or sticky notes” — Our Thesis
“a product tackling a problem that could be truly solved with a solo founder or very small team” — Tyler Tringas
A working, software or software-enabled solution (a real MVP that functions, not a proof of concept) that people will pay full price for. High-margin, recurring-revenue products preferred; low-margin, inventory-heavy, one-time-sale products are a poor fit.
“We invest in MVPs, not proof of concepts.” — FAQ
“highly unlikely to invest in a low margin, inventory heavy, one-time sale, physical product” — Tyler Tringas
A market that is intentionally niche — big enough to build a $25m-250m business by capturing dominant share, but small enough that giants and VC-funded competitors won't bother. The fund prizes 'micro-monopoly' dynamics over giant TAM slides.
“We look for opportunities where a fantastic $25m-250m business can be built by capturing the dominant market share” — Our Thesis
“big enough to build a real business, but small enough that tech giants and heavily-venture-funded competition won't find it worthwhile to compete” — Tyler Tringas
“not in the business of putting founders on a 'unicorn-or-bust' trajectory” — Tyler Tringas
Launched product with real customers paying full price, ideally up to $1-2m in annual revenue, and evidence of at least one repeatable customer-acquisition channel. Healthy MRR growth is a strong signal; idea-stage and pre-product companies are not a fit.
“You've launched, have some paying customers, and some feedback. We don't invest in idea stage, pre-product companies” — FAQ
“evidence of at least one repeatable channel of acquiring customers” — Tyler Tringas
“significant gap in funding for calm companies all the way up to about $1m in ARR” — Tyler Tringas
Long-term ambitious founders running a lean, capital-efficient team who can avoid burnout and want to build on their own terms. The fund treats founder sustainability as a core risk and aligns its terms (Founder Earnings Threshold) to pay founders a real salary before investors share in profits.
“founders who are long-term ambitious, that want the best chance at building a fantastic company on their own terms” — Calm Company Fund: Five Years In
“We believe that stress, burn out and overwork are more likely to kill your startup than not having your customer acquisition funnel fully optimized.” — Tyler Tringas
“the primary obstacle to achieving ambitious goals is the founder or team burning out” — Tyler Tringas
Profitable, capital-efficient, recurring-revenue software businesses that grow sustainably and are never dependent on raising more capital. The model should not require raising millions every 12-18 months; high gross margins and a path to profitability matter more than blitzscaling.
“Calm companies grow at a sustainable pace, are focused on being profitable, are capital efficient and raise reasonable amounts of capital but are never dependent on it” — Our Thesis
“raise reasonable amounts of capital but are never dependent on it” — Tyler Tringas
“At least a dozen companies are profitable enough to be making quarterly Shared Earnings payments.” — Tyler Tringas
A market with little or no direct tech-based competition — the founder should be entering a niche being served manually, where building a real product creates a defensible micro-monopoly. Avoid 'hot crowded markets with tons of venture-backed competition.'
“Avoid hot crowded markets with tons of venture-backed competition...prefer niche, overlooked, unsexy markets that VCs avoid where the founder can build a 'micro-monopoly' business” — Calm Company Fund: Five Years In
“small enough that tech giants and heavily-venture-funded competition won't find it worthwhile to compete” — Tyler Tringas
“no direct tech-based competition” — Tyler Tringas
Awareness that the toolchain and capital landscape now make small, profitable software businesses viable in a way they weren't before — no-code tools, easy incorporation, alternative financing — enabling founders to test viability first and preserve optionality rather than committing to unicorn-or-bust upfront.
“a proliferation of new tools and funding options are creating more pathways for entrepreneurs to build and fund software companies while maintaining flexibility and optionality” — The Entrepreneur's new path of maximum optionality
“Before you even tested the business you had to commit to one path and hope you chose wisely” — Tyler Tringas
“It's easier to get $1m to open an Arby's than $100k to build a Micro-SaaS” — Tyler Tringas
A reasonable, well-scoped raise — typically a single round of $100k-$500k (the fund can lead $500k-$2m) — used to reach sustainable profitability, NOT a plan to raise millions more every 12-18 months. Founders should want capital they aren't dependent on and that keeps their optionality open.
“We invest between $100k – $500k” — What We Invest In
“Not ideal for founders planning to "raising millions more in capital every 12 to 18 months"” — Tyler Tringas
“zero pressure for founders to raise further rounds of financing or sell the business, while also keeping those options on the table” — Tyler Tringas
“every founder building in software/web/tech thinks they should raise VC when in reality almost none of them should”