Starting & Sustaining a Fund for Calm Companies with Tyler Tringas

Starting & Sustaining a Fund for Calm Companies with Tyler Tringas

Brian Casel: [00:00:00]

Hey, it's Open Threads. It's my podcast. I'm Brian Casel. Welcome to it. Today I'm talking to my friend Tyler Tringas. He is the founder of Calm Company Fund. They are an investment fund for startups, mostly software startups that are built to be calm companies. So, you know, strong value propositions, sane working hours, profitable trajectory, you know, simple, good businesses. That's what Calm Company Fund is all about. And they actually invested in my company ZipMessage, in 2021. And it's been a fantastic experience, you know, working with Tyler and the community that's been built around Calm Company Fund.

So I wanted to talk to Tyler today about his transition of starting the fund a, a couple of years back, and a couple of other things that he has learned along the way, and some of what makes [00:01:00] Calm Company Fund different and unique in the startup environment.

Today's episode is brought to you by ZipMessage. That's my product. It's for async communication. Great for Calm company companies, like mine. We use it every day, that's for sure. I'll tell you a thing or two about that later in the show. For now, let's talk to Tyler about building Calm Company Fund.

Tyler Tringas, welcome to the show.

Tyler Tringas: Hey, Brian. Good to see you.

Brian Casel: Yeah, good to see you too. We were, we were actually just hanging out in person what, like a couple weeks ago over at Founders Summit, which you guys put on. It's a great time.

Tyler Tringas: Yeah, just a couple weeks ago.

Brian Casel: Well yeah, it's great to to finally have you on the show. You know we've, we've known each other for a couple years now, but I wanted to um, really dive into, you know, your work with Calm Fund. Which, you know, I'm a ZipMessage, of course is funded by Calm Fund, and it's been a really great experience for the past over a year now. I, I've been in there.

Tyler Tringas: Yeah, glad to hear it.

Brian Casel: Yeah. it, it's been really awesome. [00:02:00] And, you know, I w I don't wanna like go through the whole backstory. You know, I know you've, you've told that on, on other podcasts. I always like to point people to Mixergy as like the canonical. Like story of everybody's startup over there, you know? But I, I did wanna like, sort of, cause I think there are some interesting parts of the story of like, you know, first how you got into Calm Fund. It, it, sort of like came outta nowhere a few years ago when, when you started it up. But I'm, I'm also more interested in, cuz it's been several years now what you've learned over the years and how it's grown and how it's evolved and maybe what, what has changed over this time. So,

Tyler Tringas: Sure,

Brian Casel: So I mean, you know, for those who are sort of just hearing about this for the first time, I mean, how do you explain what, what's like the explainer for, for Calm Fund right now?

Tyler Tringas: Yeah. So we're the Calm Company Fund. We are like, like many early stage investors. You know, we're a fund we write checks. We give entrepreneurs capital to kind of build their business, and then we try to also help them succeed through a variety [00:03:00] of mentorship, community, resources, kind of the whole, the whole kit and caboodle.

And the thing that makes us, I think, somewhat unique is that we're focused on a, a different category of entrepreneur than what most people would be familiar with, which would be like a traditional VC, right? Which is, which is making early stage bets and hoping that you build kind of a, you know, multi-billion dollar unicorn.

And if you don't hit that, you know, they, they'd rather you sort of you know, hit that goal or die trying along the way. And we believe there's a sort of much wider spectrum of, of outcomes that entrepreneurs consider to be success. And we've structured our fund in such a way that those kinds of successes are also a success for us.

So, you know, if you just raise a small round of capital, you build a nice, profitable business, maybe you sell it, maybe you run it for a long time and take profits out of it. All those kinds of scenarios are a win for, for our model, which is somewhat unusual in the market.

Brian Casel: Yeah, it is unusual and I remember, you know, about a year ago when I was going through the process [00:04:00] of exploring multiple funding routes. I was sort of comparing just self-funding like I've been for the last 10 plus years. I was talking to several individual angel investors. Maybe, you know, gathering of several checks from, from multiple people. I was looking at a couple of different funds and, you know, the model and the, and the structure of the investment agreement through Calm Fund. It was both like unique, but to me it was the most attractive. Obviously. That's, the ,that's the direction I, I went.

It, it sort of offered the most optionality and it sort of aligned with my personal goals and, most likely scenarios of going forward.

So how do you sort of explain it? I mean, I, you know, I, I want to point folks to the Calm Fund.. It's, right? Like the website? So everything, you know, you guys have a lot of really good content and, and documentation on how the structure works. But how do you sort of explain to folks in a nutshell what makes it a little bit different from a typical whether it's a fund or taking checks from angel investors? Like Yeah, How, how [00:05:00] does Calm Fund sort of fit in there?

Tyler Tringas: Yeah, there's basically two pillars to it that, that you need to know. The first one, What I pretty much just said, which is that, you know, like our strategy and our vision for what kind of entrepreneurs we want to fund is just different from traditional venture funds. It's also different from, I would say the substantial majority of angels simply because a lot of angel investors have kind of adopted this mindset of being like a, a mini VC, right? They're sort of taking the strategies and tactics that they read about VCs using and applying it to their own angel investing, and there's nothing necessarily wrong with that. It's just that, you know, they end up largely on average doing kind of the same sort of thing, which is, you know, writing checks in the hopes that you build a truly massive business or you basically fail and lose all the money.

So, you know, we're trying to look for more of a, you know, singles, doubles and triples kind of approach to our portfolio versus the, you know, tons of strikeouts and one home run kind of approach. Yeah. The second piece is, you hit the nail on the head with the word optionality.

Brian Casel: That's to me, what, what [00:06:00] sort of, clicked in my mind cuz like, I was sort of going through this like crash course, you know, of, the idea of taking investment and all the different options out there. And it took me a while to sort of like, wrap my head and, and, really, understand what is the right fit for me. And it, and it did come down to idea that you know, chances are I'm probably going to hold and, go, you know, slow and steady with this thing. I don't know what's gonna happen in the future. Whether we would raise a venture round. I would say probably not. More likely is I would hold it for several, you know, mul hopefully multiple years and get to some sort of exit sometime down the road. And I don't know when or, or what that would look like. Like the agreement for a Calm Fund and the numbers and everything just sort of like made sense.

The other thing that you mentioned, is that the, the network of all of the investors and all the mentors and fellow, you know other founders in in Calm Fund also made it pretty attractive. You sort of get the same benefit of being connected to individual investors, but through this, through this network and there's just a lot more of them. So, [00:07:00] So, that was pretty cool.

Tyler Tringas: Yeah. I mean, it's a real like.. Calm Fund at the end of the day is a, is very much a sort of scratch your own itch project where, I'm trying to sort of build the support network and infrastructure and resources that I would have wanted to have had, at the early start of my kind of entrepreneurial journey. You know, you probably are very familiar with it, you know, having been bootstrapping for a long time, it's kind of lonely. It's really hard to get, like a lot of the mentorship and resources that that you do get from working with accelerators and venture funds and stuff like that. You really do kind of miss out on that. And it can really accelerate your journey to have that support network and help you kind of see around corners, not reinvent the wheel, all that sort of stuff. And you can, and I think you've done a very good job of like kind of cobbling it together, right, through Twitter and through podcasts and through things like that.

But there's something about layering in a financial incentive for everybody that just helps kind of bind it all together and keep everyone [00:08:00] motivated. So yeah, I'm, I'm happy to hear that.

Brian Casel: Yeah, for sure. I mean, you know, I, I've said this to other, other people before that like the, the network and the mentors and, and just like access to the whole community and, and all that. Like, I wouldn't have joined, Calm Fund just for that. Like still the decision for me to, to take funding was like a financial decision. And I, and I liked it because it was like one check instead of gathering multiple checks and the complexity of all that. So, and, and then the, the deal terms and all that and, and the structure of, of the agreement all sort of like made sense to me. But then adding in the network and the connections, because I, I have built a personal network sort of outside of Calm Fund with, a lot of other people over the years. But yeah, it, it, sort of just all clicked together. And then, and then, I mean, you also add in like the resources and and you know, tools and discounts and things like that. It's, it's nice. And, you know, we'll, we'll talk in the other episode about Founder Summit, which was great to start to, you know, meet even more people who, who are involved in, in this community as well.

[00:09:00] So, I did want to go, you know, go back a little bit to your story, you know, for folks like, can you give us like a nutshell of like like the, your previous startup? It just seemed like interesting to me see someone like you go from bootstrapping a software SaaS selling it, and then just deciding you're gonna start a fund. It sort of comes outta nowhere. Like, like that is not a typical path that, we see, you know, that, that sort of shift is, is really interesting to me. Like, how did that come

Tyler Tringas: I think that, yeah, it is. It is interesting. So a couple of thoughts that come to mind about that transition. So, yeah, I mean, first as you mentioned, I'd been an entrepreneur for a while, had some, some projects that didn't work, some projects that did work. Eventually bootstrapped a, a B2B SaaS business. Ran it, you know, as basically a Calm company. You know, built it to a small remote team, nicely profitable business, and sold it to a private equity shop, at this point, almost five years ago now, time is really flying.

And so looking back on that, it was like, okay, you know, I was really frustrated that I had no kind of financial partner [00:10:00] to work with. And I had experienced that really, really acutely actually with a previous startup, in the clean tech space. Where it was my first startup ever. I was working as like a clean tech advisory person and basically in finance. And I wanted to build a software company in the clean tech space. And, you know, this is maybe like 2011. And I thought, okay. You know, it was pretty naive. I was like, we need some, we, we genuinely did need some money. It wasn't really bootstrappable business. We needed like a million bucks to, to build this thing.

And we're like, okay, well it's software, so I guess we should go pitch VCs. And we started talking to these VCs and we started laying out this plan for like, we're gonna raise a million bucks and then we're gonna build like a hundred million dollar business. You know, and this was our game plan. And we didn't know at the time that that pretty much excludes you, right? They were, you know, we got like an interview at YC and they were like, okay, but explain to me how this is worth 10 billion someday. And I was like, oh, it's definitely not like , the market's way too small for us to build a 10 billion dollar business.

And so I kind of learned that lesson the hard way that there's, you know, there's this whole [00:11:00] network of, financial institutions that fund entrepreneurs, but there's also a ton of white space where there's all these great entrepreneurs and great ideas that don't have any natural partner. So that was kind of frustrating for me, after having bootstrapped the business.

So I started thinking about that problem and at, at the same time I heard like, I think it's Kevin Kelly, was talking about. that there's like this, this, this tiny little upper tip of the Maslow's hierarchy of needs pyramid, right? And so, you know, you've got like meaningful work that people will pay you for and all that kind of stuff, and you're going up and up and up. And the very tip top he says is it's something that maybe only you can do. , right? That's like the most meaningful work you can possibly do. If you can find something that po it's pos, it's arrogant to say like, literally only I could do this. But sometimes you find something where the answer to that question is like, maybe, maybe I'm like the only person who can really do this.

And I was thinking through, you know, what I wanted to do next and I had this background in finance, like early on in my career [00:12:00] I was, you know, I was basically in an advisory role, but I was working with venture funds and pension funds and, you know, massive companies like GE and Exxon and Fortune 100 companies and things like that. And I really had a pretty good understanding of how that world works.

And then I took this complete hard pivot, like quit my job, learned to code, started to become a software entrepreneur. And so as I was thinking about, okay, why isn't there the sort of like, you know, our original pitch for the fund was funding for bootstrappers. I was like, why isn't, why doesn't this exist? I was like, well, maybe it's actually just that there's almost nobody who takes a hard pivot out of the world of finance directly into bootstrapping SaaS businesses. And maybe there's just not someone with those two skill sets that they can sort of combine and build a fund for bootstrappers.

So that was kind of the hunch that I had. I was like, well, maybe this opportunity is there because, nobody else can do it. And so we just started, just started working on it and it turns out, this world is very unique and weird [00:13:00] in the sense that you don't really need any licenses or certifications or anything to, to start what is it? You know, we're effectively a venture fund in terms of regulatory purposes. And you just can do it. Like if you can convince enough people to, to work with you on you can just start it, which is kind of awesome and, and very kind of bootstrapper-

Brian Casel: It's pretty

Tyler Tringas: -friendly.

Brian Casel: -interesting. It definitely makes a little bit more sense to me now, like seeing that tra- it's almost like your, your, your, your pivot into, into bootstrapped SaaS was like the unexpected turn in your career. And, and you know, to me it's like, it's like starting a fund, like this, like coming out, you know, because like when I, I think the big attraction to bootstrapping software businesses, you know, like for me, I, I, I started to discover this whole ecosystem probably around like 20 2009, 2010, 2011, you know, discovering Mixergy discovering like Startups for the Rest of Us and like all these different like communities and and what was most interesting to me was like how simple and straightforward it [00:14:00] is. Like build a thing, sell it to customers.

Tyler Tringas: Yeah.

Brian Casel: You know, provide value, make a nice, comfortable living, flexible and, and do some work that you love. Right? That's always been the most interesting and least complex thing. And, and I don't come from a background in finance. I've, I've never been interested in the, you like structuring deals and, and, and things like that. And I've built and, and sold several businesses and like the worst experiences of my career have been like, dealing through that stuff. Due diligence and like deal terms and all that, all that stuff.

Tyler Tringas: Yep.

Brian Casel: So like, just the simplicity of like building and, and going, is it what has been attractive? And, -

Tyler Tringas: There's definitely days where I miss that simplicity, that's for sure.

Brian Casel: Yeah. I mean that's it's so interesting for me to see like someone who seems like, like, it's like one of us, like one of these builders who, who you are, sort of like have that background in, in, finance. So, makes total sense. Yeah, like getting into like the, the launch of like, what year was it that you actually decided, so [00:15:00] when you sold the business and then, and then started Calm Company fund,

Tyler Tringas: Uh, Uh, So -

Brian Casel: At the was Ernest Capital, but-

Tyler Tringas: -Yeah, there was a couple years actually in between almost two years, I think. So I think I sold the business in 2017. And it wasn't until 2019 that we that we launched Ernest Capital, which was just, it's just, it's the same exact company. For people who don't know, we just rebranded to Calm Company Fund.

Brian Casel: Yeah, what you doing in that two years? Were you like exploring stuff, taking time off? What did that look like?

Tyler Tringas: Yeah. I, so I set this goal for myself of, you know, I, I sold the company. It wasn't like "never work again," money, but it was like, "you don't need to think about making money for a little while" money. And so I thought, okay, well what's something that I could do with my time that I can only do because I don't need to think about money, right? That was like the filter that I was using for trying to figure out what to do with my time. I was like, this will be an interesting experiment. What stuff can I do that will be fun and that maybe I can only do because I don't need a salary or whatever for, for the foreseeable future?

And, It, [00:16:00] it took a little winding path, but basically I ended up sort of joining this startup called Maptia which was like a modern redo of National Geographic. So it was kind of like long form, beautiful photography, forward journalism with the same kind of topics, you know, conservation, anthropology, that sort of stuff. And I found this sort of, you know, website and found the founders and convinced them to let me join them. We ended up basically it's kind of hard to even explain what happened, but we ended up launching an ocean conservation nonprofit called Sea Legacy. So we, we ended up collaborating with one of the most popular photographers on the site.

And they kind of came to us and said, Hey, you know, we have a bunch of Instagram followers. We wanna launch our own nonprofit so that we can do these ocean conservation expeditions and give away all of the assets and media to activist campaigns, right? And so we're like, okay cool. And so we basically ended up taking this team that was working on this startup to go and [00:17:00] help them launch this nonprofit.

And we, we brought this sort of like SaaS mindset to it. So we, we built this like subscription membership product for people to make recurring donations. And uh, it was kind of cool. Like you, you were a recurring member and you would get all this like behind the scenes content from the expeditions and all their photography tips and stuff like that. But it was very like SaaS, you know, focused like with the funnels and all this kind of stuff. And pretty quickly it became like a real operation. It went from this little side hustle to like several million dollars a year run rate in a matter of months.

And so I ended up getting sort of conscripted to go and be the, the COO of this, nonprofit for about a year. Which was fun. I really enjoyed it. I learned a lot, but I learned that, you know, the nonprofit world is not for me. So along the side I was working on this fund idea and yeah, kind of right at the same time that I was thinking about wrapping up that that little tour you know, the first couple investors basically committed to, to the fund. So, so we were off to the races.

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Okay, back to the show.

Brian Casel: So I, I wanted to get into, I wanna sort of like skip ahead, right? So, so, you know, you, you sort of cobbled together a couple early investors. I want to, I, I have like, basically two more questions about about Calm Company Fund and, and one was you guys went through a pretty interesting rebrand. You know, you were originally called Ernest Capital, which I actually thought was a pretty cool name. And then, you know, now you're a Calm Company Fund. Can you talk a little bit about that? You first of all, like, why the change and I'm actually more interested in the process of changing the company name and like, how, how difficult is that?

Tyler Tringas: Hmm. Yeah. So, so, the reason for changing was twofold. The first one [00:20:00] is I also liked Ernest Capital. I thought it was you know,

Brian Casel: I mean, Calm makes a lot of sense too, and I, I like the branding of like, it's totally what, what it's all about.

Tyler Tringas: Yes, exactly. So, so when with Ernest Capital, I, I mean the brand I think worked pretty well outta the gates. Folks liked it, you know, ki they kind of like got the vibe of it. The big problem we had from a branding perspective that was really bugging me for the first year and a half that we existed was we kept getting defined as like, not VC, right? We'd get defined as like VC alternatives. You know, people would put us in blog posts of like "16 Alternatives to VC". You know, like, "What's going on in the alt VC space?" Let's talk to Tyler at Ernest Capital.

And I think from a branding perspective, it's really bad to be defined as a negative. right? You, you want to, you want your brand to stand for something, not to stand for what you're not. And I actually saw this like firsthand from working in clean tech which used to be called alternative energy, until some very smart people said, this sucks[00:21:00] , let's actually take an adjective that people like, which is clean and let's, let's sort of rally around, you know, clean energy, not alternative energy. And so we kind of had that same mindset.

Brian Casel: That's a really interesting way. Yeah, I haven't-

Tyler Tringas: Yeah, exactly. And it was really like, it was just massively defining who we were. To the extent that it was also like getting confusing because, you know, people would, they would, treat like what we were doing and I don't know, like Stripe capital, you know, and revenue-based financing and all these things.

We'd be in all the same bucket. And it's like, these are very different products. So we need to we need to do some work here to sort you know, make it clear what we do and what we stand for.

Brian Casel: It's almost like the previous name was like, sort of like defining the fund, whereas the new name Calm Company Fund sort of defines the companies that you invest in, which, which almost like almost tells half the story, at least half the story, right there for a newcomer, whether it's an an investor or a startup.

Tyler Tringas: Exactly. Yes. Yeah. We wanted something that, so once we kind of started the process [00:22:00] of, okay, we're gonna rebrand to something we need, something that we stand for. We wanted something that entrepreneurs or, or companies would identify with, even if they weren't affiliated with the fund, that was the goal, right?

So nobody was ever gonna say like, oh, my company's an Earnest company, right? Like that, that means you're in our portfolio, right? That's it. But you know, this idea of Calm Company is something that a lot of entrepreneurs aspire to. And, we, we didn't really come up with it ourselves. We kind of, you know, we already had this pretty sizable community from our portfolio and Twitter and wherever. We kind of just kept polling and polling with different questions to sort of say like, what, what actually resonates with you? You know, cuz we want to just attract more people like you. And calm was by far the adjective that that stood out the most. So, yeah, that, that was the.. It was the clear choice when it finally came down to making that decision was, you know, Calm, Company Fund. There were a million other things, that we tried and you know, this was, there was no close second basically .

Brian Casel: yeah.

Tyler Tringas: Yeah.

Brian Casel: It's [00:23:00] interesting. I, you know, there, there's been some talk with with some of the people that I, you know, get advice from and stuff about ZipMessage. As, as you know, you know, we're sort of in the middle of this, sort of I, I don't know if I'd call it a pivot, but we're starting to focus in and, and start to niche down on, on coaches. And multiple people have suggested like, well, maybe you might start thinking about a a rebrand of, of ZipMessage.

Tyler Tringas: Hmm.

Brian Casel: And I, you know, to be honest, like I'm not necessarily married to the name of ZipMessage. I could see how it it doesn't fully paint the picture of, of where the product is headed. But at the same time, the idea of changing the name and the process of changing the name and the fallout from changing a name sort of scares me. And that's why I lean towards like, just don't change it, you know? And so like, I'm, I'm curious to hear like how it, it, I'm sure it's different, you know, because Calm Company Fund is not like just a single SaaS product.

Like has there been any, any challenge around like, you know, now you introduce it as Calm Company Fund, and maybe like in the, [00:24:00] in the early days of the new name, did you have to like constantly go through like we're Calm Company Fund. You might have heard us known as Ernest Capital before, but now we're this name and like, like I, I fear that like having to explain the, the old name and the new name for like a year plus,

Tyler Tringas: Yeah. So I'll say, I did say that the, the reasons for the rebrand were twofold. One is the, the one that I just articulated to you and the other one is we got a cease and desist letter um. So, uh, yeah, there, so, This is a big problem with branding stuff in the, what's just called financial institutions category of, of, IP, which is there's so, so, so many firms out there, you know, every little LLC for, you know, buying up some bit of real estate has got a name and they're frequently trademarked.

And it turned out that some like retirement advisor in Georgia had trademarked the word earnest for the entire financial services industry. And we were sort of like confused by that because there's a ton of things like that have the word earnest in it, you know, including like [00:25:00] is like a student loan kind of site And stuff like that turns out like they were just suing everybody. Um, so, uh, so, so that, took It from a you know, maybe we should do this to, oh yeah, we have to do this.

So, you know, to your point, like ,it's not something to take lightly. And if you don't have that kind of, you know, external pressure I do think it's okay to, to sort of wait. In terms of how the transition went, I think it actually went very well. I probably, because I think honestly, and I can say this because I I did about 1% of the work. Basically, Najva Sol, who's our head of marketing and an amazing, branding agency called Scout Lab, they did 99% of the work and they just nailed it, both with the name and with the branding and everything. It was like, when you get it right, it just fits. and everybody goes, oh yeah, of course. Like of course that's what you're called now. You know?

So we didn't have that much of an uphill battle in terms of that. There was, you know, some ongoing like, Hey, you know, people are like, what happened to your other company? It's like, oh, it's still the same company. We just [00:26:00] rebranded, blah, blah, blah, But on the whole, it was not that much work after we launched it to be honest. yeah.

Brian Casel: Yeah. I mean, I remember about a year ago, maybe a little bit before then, I forgot exactly when the rebrand happened, but like, I think it, was, it, it, it to me as like sort of an outsider looking in, it was like a more of an issue over a year ago. And now, like anybody that I come across, like sort of basically knows it as Calm Company Fund. You know? Which is.. I guess that's the goal right?

Tyler Tringas: Yeah. If you're gonna rebrand, do it well, that's.. That's the lesson

Brian Casel: Yeah. Awesome. You know, I did want to ask about like, things that you've learned or maybe tweaked or iterated on, from your perspective in terms of like being successful with Calm Company Fund, right? Like, so I know you're heavily involved in like the decision making process on like funding startups and and also, you know uh, bringing investors in. But like, what are some of the things that like maybe you've, you've like iterated on in terms of like the, the types of companies that, you invest in or the [00:27:00] the criteria that you look for or just things that make the whole thing run, run more smoothly?

Tyler Tringas: Yeah, good question. So one of the things I think that I've learned as a, you know, so I, mean I, people might not be familiar with the inner workings of how funds work. Some funds, they have a real sort of decision by committee. You know, maybe you have three partners and they all have to give a thumbs up before you make an investment. Sometimes you might have a literal investment committee who's a separate group of people that have to approve investments. That's kind of more of a thing for really, really big funds. But in my case, it's just me. Like I basically, you know, I decide if I'm gonna invest and then we pull the trigger. There's no kind of other step for that.

And that's kind of a lot of responsibility. And so very early on, one of the things that I was very reticent to do was kind of coloring outside the lines of the thesis that we laid down. You know, we, we kind of gave this very detailed strategy for how we were gonna invest. And part of it, for example, was like, we're only gonna do very early stage stuff because, you know, once a company is doing, let's say, close to a million a year in [00:28:00] revenue, Well, You know? They have, all these other options. They have, you know, debt financing, they, they could work with VCs, they could blah, blah. blah, blah. You know, we don't wanna go and compete with all those folks, so we're gonna really, really stay in our lane.

And I missed out on a couple of opportunities that would have been great had I had sort of the, I don't know, confidence or whatever to stray, just a little bit, outside of that lane that we'd created for ourselves. So that's something that, you know, I mean I think that's kind of a natural progression for investors is to get a little more confidence of when to, when to break your own rules. But that's something that, you know, I had to learn the hard way um, by missing out on some really good investments for sure.

Brian Casel: I mean, that makes sense, right? you know, I'm friends with a whole bunch of other SaaS founders, and a lot of them are like much further along in terms of like multiple years into their business. But they are very much on the bootstrapper Calm Company track, right? But they're just multiple years into it. And, you know, maybe they're making some big investments in the business. They're starting to, you know invest in growth, but they don't necessarily want [00:29:00] to go the the VC route. There is still that, like, gap in the in the market and that like middle ground. So like, not you're not in like idea stage first year. You're, you're several years in, you're past product market fit but, yeah, you just wanna sustain.

Tyler Tringas: Exactly. Yeah. And that's something we've learned is just that there's, you know, the opportunity is larger. I think it's a little bit like, I dunno exactly how to say this without, so we I think we overestimated the competition in terms the competition being like other sources of funding. As saying like, well, you know, the white space can't possibly be this huge, there can't be this many opportunities that people are just completely missing. And it turns out there really are. So we have a lot of work to do, basically.

Brian Casel: Yeah. How so how about like just the dealing with the volume of, I mean, you must get pitched all the time and, and I know you have like an official application process and all that, so like, , any, any tips on how you have, not necessarily tips, but like things that you've optimized whether it's your time and the [00:30:00] decision making progress to, to make sure that you are getting exposure to the best possible opportunities. How do you sort of like sift through it all?

Tyler Tringas: Yeah, it's a good question. It's the thing that, that we have maybe the least dialed down despite making, I would say, huge progress on. It's a really difficult challenge because, you know, I don't control the volume of inbound. Right. So we can set up a system that, you know, does a great job of managing when we get 200 applications a month. But then if, you know, a tweet goes viral or some publication decides to feature us or whatever, and we get 700 applications in a month. Well, how do we prepare for that, right? What do we do? Like our time is still finite, so do I just give, you know, shorter shrift to each application and try to make decisions faster? Do we just let our wait time triple, you know, and, and start to fall over to the next month?

It's actually very hard and I've actually been trying to pull some insights from like industrial design [00:31:00] because there's certain types of manufacturing that have to deal with this sort of thing where you have to build systems that are resilient to, you know, significant influxes you know, of capacity. But the gist is it's extremely hard and, and I'm actually not, still don't feel very happy with where we are. The main thing we've done is try to bring a lot more systemization to our approach. I think that in general most people doing early stage investing, be they Angels or VCs or whatever, you know, the process is still very sort of like too artisanal and handcrafted, right? There's a lot of like, I'm gonna sit down, I'm gonna listen to your pitch for an hour, you know, we're gonna meet in a coffee shop. I'm gonna look you in the eye. I'm gonna decide, you know, does this, does this person have the right stuff? Right. And I just think like we can do better and we can be more efficient about it.

So now we do have like this really rigorous application process. We push everybody to it. It's open. We don't need a warm intro or any of that sort of stuff. And we also have a pretty detailed external [00:32:00] research process that we do ourselves. So we get a lot of information from the founder. And then we go and we check on the competition, we check on the pricing landscape. we do all that sort of stuff, and we pull all that together into a research brief before I even meet with the founder. And that's been the main, like the main unlock for my time has been to have actually tons of work done before I even get on a call with the founder, because I think that.. Like my KPI is, I want as many of the calls that I like, if I'm gonna spend an hour on a Zoom call with a founder, I want a hundred percent of those ideally to convert to term sheets, right? I want a hundred percent of those to be great companies that I'm excited to invest in. And so we've been trying to sort of close that gap and, and get to where, you know, I think we're at probably around a third right now, which is ,you know, insane for the industry. The typical like Angel or VC might meet with like 300 companies before they invest in one, right?

Brian Casel: Yeah, it it makes a ton of sense. I mean and I could totally see how like just, you know, like the whole idea of like a pitch [00:33:00] deck can be opt, it's just like a job, like, a, like a resume. Like it's just gonna be like the highlight reel and half of it is kind of made up and like, you know and you can't, and, and that's like not enough to go spend a half an hour, an hour on a call when you've, when you've got hundreds of these things coming, you know.

I mean, it sort of like reminds me and it's just like any sales process really. Like, like my previous company Audience Ops, I went through great pains to, to make sure that like, cuz I didn't really enjoy doing sales calls. So if I was gonna get on a call with someone I wanted to know, like they were basically sold and it was just, sort of crossing the T's and, and talking to them. You know, like I, I showed the pricing. I showed them like a 10 minute video, like everything before they even ever book a, call with me. So that I just kind of show up. ..

Tyler Tringas: Yep. Same idea.

Brian Casel: Yeah, makes a lot of sense. Yep.

Well, that wraps up today's Open Thread. Hey, tell me what you think. I'm on Twitter @casjam, and right after that, head over to iTunes and give this show a five star [00:34:00] review. Really helps it reach more folks like us. I appreciate it. Talk to you next week.

Starting & Sustaining a Fund for Calm Companies with Tyler Tringas
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