Calm Company Fund Questions & Answers
We invest in profitable, sustainable, calm businesses. We invest early in profitable businesses that want to maximize their chances of success and build for the long-term and retain control.
Calm Companies grow sustainably in every sense of the word. They don't believe in hyper growth or nothing. They aim for profitability as soon as possible — their Plan A after raising from us is to get to break-even and grow the business through cashflows. They believe success shouldn't create detrimental social, environmental or team impact. Calm Companies build companies their own way and we love that.
You may have known us as Earnest Capital — we had a lot of fun with that name — but we decided we needed something new, a rallying cry to get behind, a name to reflect a new kind of a startup capital that aligns with the overwhelming majority of entrepreneurs who want to build sustainable profitable long-term focused businesses. You can read more about the change here.
We primarily invest on a rolling basis using a financing structure that we created called the Shared Earnings Agreement (“SEAL”) that allows us to back founders who want to build sustainable profit-focused businesses without the pressure of having to continually raise capital or sell.
Short for Shared Earnings Agreement, a SEAL is a financing structure created by us to invest into calm companies to create a win-win situation all round. It is not debt, doesn’t have a fixed repayment schedule, and doesn’t require a personal guarantee. Investors make an upfront capital investment and then are entitled to receive Shared Earnings which is a percentage of Founder Earnings (a mix of founder salaries, dividends and retained earnings). Shared Earning payments only kick in once founders are able to pay themselves at least the amount agreed before hand (we call this the Founder Earnings Threshold) — we want you to thrive not just survive! To understand more about SEALS, check this out.
Nope. But an easy mistake to make. Revenue-based debt products are repaid as a percent of top-line revenue. By using Founder Earnings plus a threshold, a SEAL is much closer to a profit-share. Investors expect a growth period after the investment before any Shared Earnings begin to be paid.
We invest between $75k – $250k and can lead rounds of $500k-$1m.
Currently, we are able to invest in the US, Canada, most of the EU, Australia and New Zealand. Probably a few other places. Apply for funding and we'll try and figure it out.
If you would like to start a US-based entity, our portfolio company FirstBase is the easiest way to launch a US LLC or C-Corp. Use the code “earnest” for $20 off.
We have a preference for C-Corps and believe they are frequently the best option for founders as well, but LLCs are not a dealbreaker for us. We've invested in a number of non-US businesses and are happy to continue doing so. There is a little bit extra diligence and legal work required but it is truly just a little and not a big deal.
If you would like to launch a US C-Corp our portfolio company FirstBase is the easiest way to do that. Use the code “earnest” for $20 off.
Our center of gravity is B2B software-as-a-service (SaaS). Recurring revenue, high margin, software businesses are our bread and butter and represent the bulk of our investments.
In no particular order: a Private Slack community of 200+ founders, mentors, and investors; closed-door tactical workshops led by operational experts limited to six companies at a time; exclusive partnerships with leading brands like AWS, Webflow, Notion, and more; community-wide licenses to books, courses, tools that our founders can use ad-hoc; operating playbooks designed to used off the shelf for key needs; personal "Calm Boards" comprised of knowledgeable mentors centered around your needs and ideas of success; and a lot more stuff.
We treat you like grown-ups. Calm Company Fund is, at its core, a service business. Our job is to make world-class mentors available to you and provide you with as many helpful resources as we can...but we are not here to tell you how to run your business. We understand that everything we provide is optional — to earn the right to engage with you we are intentional about what we provide.
We're not aiming to be founder friendly. We are founder aligned. You can check out what people are saying on our Wall of Love.