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Tyler Tringas Profile picture
@tylertringas
Sep 7, 2020 • 4 tweets • 1 min read • Read on X
Have mega funds killed the seed fund business model? With seed valuations pushing $30m I don’t see how a seed fund pencils.

$250k @ $30m probably nets ~$4m on a $1B outcome. Ballpark for every 10-15 checks you need to hit 5-10 of these (or 1x $10B) to hit baseline returns..?
I just don’t see how practically anyone can credibly argue they’ll do this. Only option to me seems to be to play a different game.
Think Differently
Lot of “our VC fund doesn’t invest at $30m seed” but I wonder how credible it is to say: we’re a VC, seeking outlier companies, short-term incentivized by %-follow-on and markup IRR, but we pass on all the hottest deals.

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More from @tylertringas

Tyler Tringas Profile picture
Feb 20, 2023
Ok folks, Feb marks 4 years since we started investing at @calmfund and it's time for a big update thread. It's been a challenging but insightful few quarters but I'm absolutely fired up about the road ahead. I'll cover what we've been up to, our strategy & the game plan for 2023
If you're new here, @calmfund is a fund built to support founders of calm companies that are capital efficient, grow sustainably, & built for the long term. Here is an overview of our high level investment thesis (we used to be called @earnestcapital btw):
"Calm company" is both an investing strategy and a mindset for founders looking to build a company in a manner that I call "being long-term ambitious" ... here are some of the key principles to give you a sense of what it means:
Read 32 tweets
Tyler Tringas Profile picture
Feb 19, 2023
I think folks are sleeping on one of the biggest and most obvious "zero interest rate phenomena" that's going to get vaporized slowly and then all at once: Andreessen Horowitz

Here's my thesis:
In recent years a16z built an incredible machine to accumulate "assets under management" (AUM) to the tune of tens of billions of dollars. Nominally they were supposed to be doing venture capital—investing in startups and entrepreneurs—but really they were making a different play
As I laid out in 2021, they (along w hedge funds like Tiger) identified there were vast pools of capital searching for *any* returns in the zero-interest-rate wasteland and came up with a fundamentally different strategy from the traditional VC model
Read 17 tweets
Tyler Tringas Profile picture
Feb 17, 2023
Good morning, AI-based tools will be a massive opportunity for calm companies, but a dud for VC. Here's my thesis:
1/ this market map will become an iconic case study of "was a feature not a product" with all of the value ultimately being split between the actual core AI platforms in the top left corner and incumbent software tools with distribution (mostly not shown) who will add AI features
2/ It's almost a meme/joke at this point, but the vast majority of these products are just (a) an API call to GPT-3 or similar platforms and (b) a thin layer of "prompt engineering"

This is the most nonexistent moat in the history of tech waves with no clear way to improve
Read 18 tweets
Tyler Tringas Profile picture
Nov 24, 2022
✨ Cultivating a Calm Company ✨
A running thread of the most important things I have learned about building a calm company and being long-term ambitious as an entrepreneur. Let's go 🙏👇
Note: I plan to expand on each of these in short essay form. Subscribe to the @calmfund email list to receive them: tyler-tringas.ck.page/94b41c3e91
Chaos inevitably happens in business. Sometimes the answer is taming the chaos, sometimes you just need to get comfortable in the chaos.
Read 31 tweets
Tyler Tringas Profile picture
Nov 22, 2022
People keep asking me "why aren't more investors using a strategy similar to @calmfund's"... the answer is very simple: it is *unbelievably* difficult to raise capital for an early stage fund that doesn't fit the traditional VC model. That's it.
For our first 3 small funds we had to raise money from nearly 200 individuals. I had to write 200,000 words of content and build a fully automated fundraising funnel such that for Funds 2 & 3, I didn't even speak to >half of the investors before they committed.
But those funds were "sub-scale" (<$10m)... in order to really address the market need, build a fully staffed team, and get the best returns for our LPs, we need to raise substantially larger funds (like $100m... still tiny in the scheme of things)
Read 8 tweets
Tyler Tringas Profile picture
Nov 22, 2022
I looked at dozens (100s?) of crypto/web3 startups and projects the past few years. I felt obligated to not miss an opportunity for my LPs. With each one I asked a simple question: "does this do what it says it does?" and every. single. time. the answer was "it does not."
I'm talking about technical and logical due diligence of the basic claims being made about the technology with regard to utility, security, and decentralization. And every time I did a little homework, the answer was an obvious no.
I'm not a technical wizard or domain expert, but I (a) tried to learn as much as I good (b) asked dumb questions (c) paid attention to technical experts and (d) just thought hard about it a little bit. Turns out that was far more than 99% of investors were doing.
Read 5 tweets

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