[Calm Company Fund]

"Inhale. Exhale. Find the space between… Calm Company Fund is going on sabbatical and taking a break from investing in new companies and raising new funds. Here’s why."

Calm Company Fund's model seems interesting. It's a revenue-based investor that makes a return based on its portfolio companies' earnings, but still uses a traditional VC model to derive its operating budget. That means it makes a very small percentage of funds committed from Limited Partners, rather than sharing in the success of its portfolio (at least until much later, when the companies begin to earn out).

That would make sense in a world where the funds committed were enormous, but revenue-based investment tends to raise smaller fund sizes. So Calm Company Fund had enough money to pay for basically one person - and although the portfolio was growing, the staff size couldn't scale up to cope.

So what does an alternative look like? I imagine that it might look like taking a larger percentage of incoming revenue as if it were an LP itself. Or maybe this kind of funding simply doesn't work with a hands-on firm, and the models that attract larger institutional investors are inherently more viable (even if that isn't always reflected in their fund returns).

I want something like this to exist, but the truth is that it might live in the realm of boring old business loans, and venture likely is able to exist because of the risks involved in those sorts of companies.

#Business

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