Calm Company Fund Is Taking a Break

The litigation comment in there was the “ah there’s the elephant in the room” moment for me

I was a fan of Calm Company Fund's thesis from the start, but I've been puzzled by some of their choices.

Their thesis is to invest in capital-efficient, profit-focused companies. Contrast that with the Calm Company Fund itself, which appeared to have invested a lot of time and money into putting on destination Founder Summits - https://calmfund.com/writing/how-we-built-founder-summit

Running annual summits is a lot of work, and I couldn't reconcile the contrast between asking founders to be profit-focused and "calm" while also running destination events that founders were supposed to travel internationally to attend. They posted a lot of fun photos and had a lot of branding around it, but it felt like quite a distraction for a small fund and team to be operating.

Calm posted something about the events being a small net loss, but the real tragedy was the ensuing litigation with their partner for the events. You can find Calm Fund's full story on Twitter ( https://x.com/tylertringas/status/1716592486460629132 ), but the TLDR is that they partnered with a PE fund for the events, then later cancelled the partnership with the intention of running the events on their own. The other fund is now suing them for trying to take over running the events.

This is mentioned in the blog post:

> Compounding the difficulty through this period is the fact that a private equity firm, SureSwift Capital, that we co-hosted the successful Founder Summit events with, has persisted in litigation against us. That process has been an eye-opening realization that someone who is committed to wasting their own money in a pointless legal process can force you to do the same and it has been a massive drain on our already strained bandwidth and budget.

From the outside, running the Summits felt like a distraction from the start. When it spiraled into legal battles with ongoing costs, it only got worse. I wonder how they would have done if they hadn't tried to run vacation-style events every year and instead just focused on being a "calm" VC fund that focused on being profitable itself.

The letter somewhat acknowledges this contrast. However, their excuse makes it feel even stranger that they thought being "un-calm" was the key to success as the Calm fund.

> The irony is not lost on me how “un-calm” these past five years have been. I told myself that “we are doing the un-calm things to help 1,000s of founders build actually calm companies.” The jury is still out on whether that was a good plan.

Twitter post where they explain their side: https://x.com/tylertringas/status/1716592486460629132

TL;DR: They were trying to run annual Founder Summit destination events with a partner fund. They cancelled the joint agreement with the partners and expressed their intent to run them alone. Partners are suing for, as I understand it, trying to "cancel" a joint business venture that was co-developed and but continue to run the co-developed venture as if the partnership never existed.

To be honest, I never understood why the Calm Company Fund was trying to run annual destination Founder Summits at all. It seemed so antithetical to their thesis of funding calm, profit-focused founders.

I skimmed the suit itself [1] - apparently Calm put on some events together with a PE fund in a joint venture, then a guy left the PE fund... and Calm and the exited person continued to put on events under the same name while preventing the PE from participating. The PE then sued them since they feel entitled since they co-created the event.

I'm sure there's more to the story, this is just from the suit itself (so obviously from the POV of the plaintiff).

But ya, the impact of a PE lawsuit on a very small startup fund that's already trying something new/risky is going to be disastrous for their morale and future plans.

No VC fund wants to be sued, I imagine, but for the one that has a razor-thin business model and no expectations of a big exit for 10+ years I imagine the suit is a high-probability death-blow regardless of right and wrong.

[1] https://drive.google.com/file/d/1fauBdZ3Zm5m4VC9YQdyvDiIkllC...

> but for the one that has a razor-thin business model and no expectations of a big exit for 10+ years

This is the confusing part for me. Why were they trying to run an annual event like this to begin with? It's a lot of work, and they admitted it was even running at a loss.

I never understood how they squared that with their "calm" thesis.