community round

CASE STUDY

Raising a Community Round as a VC fund

How Calm Company Fund is sharing the VC upside with hundreds of unaccredited investors

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  • With Community Rounds and VC rounds traditionally seen as opposites on the funding spectrum, it may seem surprising that a venture capital fund would raise a Community Round.
  • But Calm Company Fund is not your typical VC fund. In fact, Calm Company Fund is betting against the traditional venture capital model.
  • Believing that traditional VC financing structures are misaligned with the founders of calm companies, Calm Company Fund created its own funding vehicle (the SEAL, or Shared Earnings Agreement), with community input.
  • Believing that VC mentorship programs fail from a lack of engaged mentors, Calm Company Fund ensures that their 200+ mentors have skin in the game by requiring them to invest in the fund.
  • Believing in building differently, they were a remote-first company well before Covid and prioritize mental health and financial sustainability for the team.
  • And believing that venture capital needs to be more accessible, they jumped on the chance to raise a Community Round as soon as the laws made it possible.
  • Creatively offering what’s known as "GP equity," Calm Company Fund invited unaccredited investors to share ownership in the upside of all of its current and future funds.

A COMMUNITY-LED VC FUND

We’ll have Calm Company Fund’s Head of Product and Marketing, Najva Sol take it from here →

Najva Sol headshot

What is Calm Company Fund?

Calm Company Fund began as Earnest Capital, which was “funding for bootstrappers” and has now become “capital, community, and mentorship for entrepreneurs building Calm Companies.” When we say “Calm Companies,” we mean sustainable companies that could last for the long run—companies that are funded first and foremost by their customers.

We’re a venture fund for early stage startups and we've been around for about three years. In that time, we’ve funded over 50 companies using our own investment vehicle called the SEAL, or the Shared Earnings Agreement.

We're not the only ones doing this—there are a few other forward thinking funds out there, essentially creating new types of funding options for founders so that in the early stages, they don't have to make a decision on going the traditional aggressive venture model versus a more profit-oriented, mindful growth that might allow the founder to never need to raise money again.

As of today, we have two yearly summits that bring together a community of calm founders and funders, as well as our mentors and our founders. We have an amazing custom-built internal platform that we offer to our founders and extended community.

We’d like to slowly become the number one resource for anyone who wants to build differently.

This is the perfect opportunity for all these people who've wanted to be involved to literally be involved—and not just in some small namesake way, but genuinely. If we win, they win. We all win together."

Najva SolHead of Product & Marketing at Calm Company Fund

Why we decided to raise a Community Round

It's always been in our DNA to try to make the world of venture more accessible. For example, from the very beginning of Calm Company Fund, founder and GP Tyler Tringas structured the fund to have a very large number of smaller LPs rather than a small number of larger LPs. Even before AngelList, we started rolling out our own rolling funds, which allowed people to invest in small batches rather than all at once. We always wanted to make it more accessible for people to invest in our fund and our thesis. However, the laws were not on our side until very recently—you had to be an accredited investor to invest in private companies.

When the laws changed, we wanted to raise a Community Round as quickly as possible. Arlan Hamilton at Backstage Capital led the way as a venture fund raising a Community Round on Republic, and it was so exciting to see people rally. We thought, “This is the perfect opportunity for all these people who've wanted to be involved to literally be involved—and not just in some small namesake way, but genuinely. If we win, they win. We all win together.”

To test the response from our community, Tyler threw out a tweet along the lines of “This is legal now—would you want to participate?” He attached a little Airtable form to register interest, and the response was overwhelmingly positive. That clued us in that there were a lot of people waiting on the sidelines for new ways to engage with us. So we built that pathway by launching our first Community Round.

The “What People Say” section of our Community Round is a great resource for people to understand, "Why are we here, and who are we beholden to?"

Najva SolHead of Product & Marketing at Calm Company Fund

Why did people invest?

"Big fan of Tyler and the movement he's building. 👍"

Justin Jackson face

Justin Jackson

"I really believe in Tyler and the Calm Company Fund's mission. Excited to be a small part of the journey."

Andy Cook face

Andy Cook

"I'm passionate about Micro SaaS and I want to be part of this revolution. I don't have big dollars yet. But I think that for an education purpose it's really great to be owner in the GP! Also, I hope one day to be able to sign checks on your behalf."

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Josh Louis-Alexandre

Our Community Round Learnings

Our biggest learning throughout the process was the constant surprise at who ended up throwing their lot in with us. To feel like all these people were with us—not just following us on Twitter or reading our newsletter, but actually investing in our vision—I can't describe how supported we felt. Many of the founders in our portfolio ended up investing in our Community Round too. They gave back to our community again.

Reading our investors’ comments cemented the idea that we're building Calm Company Fund not just for us, but for our broader community—and that we need to exist. As a remote and asynchronous team, the “What People Say” section of our Community Round is now a place that I send new team members during onboarding. It’s one of many touchpoints that helps people understand, "Why are we here, and who are we beholden to?"

Some amazing people from all over the world, particularly women and folks of color, have been able to join in this journey with us. The community that we work in is not necessarily the most accessible. There are a lot of identities and backgrounds that are underrepresented, and underestimated, as Backstage Capital would put it. Bringing people in on a Community Round gave us the opportunity to expand who gets to be part of our success. While it’s not perfect, we’re happy that we made this vision a reality through our Community Round.

Our Community Round roots us more deeply with the people that we're serving, and it's incredibly good for keeping us focused on what we have to do."

Najva SolHead of Product & Marketing at Calm Company Fund

Second-order effects

One of our Community Round investors, Caro Griffin who is the VP of Tech Ladies and founder of operations community Opsy, hosted a coworking session for our last summit in Mexico City, sent out a nomad guide to our attendees, and was a wonderful local touchpoint.

Another Community Round investor has ended up being great at referring us to folks. Continuing to engage the people who invested in our Community Round will be a constant work in progress for us, and we’re excited to see what will come of it.

Our Community Round roots us more deeply with the people that we're serving, and it's incredibly good for keeping us focused on what we have to do. A lot of companies start from the point of, "I think this should exist," but something incredibly powerful about a Community Round is feeling rooted in "we think this should exist, and now we're building it together." The vision behind that is exponentially stronger.

Summary

Calm Company Fund raised $1.3 million from 746 investors during their Wefunder Community Round.

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Snapshot of Calm Fund' Community Round (source wefunder.com/calmfund)

The Raise

  • Started and finished in 1 month
  • 90% of investors were non-accredited and invested $822K
  • Rased in conjunction with a rebrand

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