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"The best businesses are built when financial success is a byproduct of doing your mission really well." — Erik Allebest, CEO of Chess.com
The problem with passion-driven companies is that investors rarely understand them. As these companies grow slowly and deliberately — bootstrapped, profitable, mission-first — the conventional VC playbook feels like a foreign language. Every conversation about TAM, monetization, and return timelines can feel like an assault on the very soul of the business.
So how do you navigate capital, secondaries, and investor relationships when your compass points to mission — not exit?
Foundation of Value
The Chess.com story is a masterclass in building differently. Erik Allebest and his co-founders spent 25 years falling in love with chess — first as a player, then a teacher, then an equipment retailer, and finally as the builder of the world's dominant digital chess platform. The business was already profitable with $4 million in revenues when the first secondary investment came in 2012. No VC had touched it. No one in Silicon Valley believed chess had a meaningful TAM. That indifference turned out to be the gift.
The guiding principle was always mission over metrics: serve the chess community, grow the game, be the best place to work. Shareholder returns were never top of mind — and that misalignment is exactly why engaging investors felt unappealing for so long.
How Flashpoint Got In
At Flashpoint Direct Secondaries, we specialize in direct secondary investments — buying stakes in private tech companies from existing shareholders rather than investing primary capital into the business. Chess.com was our first such investment, made in 2012 when revenues were around $4 million and the company had no outside institutional investors.
Our investment thesis was rooted in a simple but contrarian belief: chess and the internet were a near-perfect match. The game is simple enough to learn, infinitely deep to master, and uniquely suited to online play — removing the need for two people to share a physical space. At the time, chess had lost much of its mainstream visibility. But the game had been through ebbs and flows before. Something, eventually, would bring it back.
Getting to that first meeting was itself an exercise in patience. Tracking down the company required months of persistence — working through intermediaries and cold approaches before a connection was finally made. Even then, the founders were guarded. The resulting lunch meeting, held at a Mexican restaurant in Seville, turned into a full day. A friendship was formed. A deal followed.
Over the following years, we completed several secondary transactions, acquiring stakes from both founders and employees. The bet was long, patient, and ultimately vindicated by waves of growth that nobody — not even those closest to the company — could have fully predicted.
Growth Requires Patience
Chess.com didn't catch one wave. It caught many — COVID, The Queen's Gambit, PogChamps, the cheating scandal that captivated mainstream media, the explosion of short-form content on TikTok and YouTube Shorts. But none of those waves would have mattered if the platform hadn't survived the painful 2015–2018 infrastructure rebuild that nearly broke the company.
Timing is where skill and fate intersect. The skill is knowing the wave will come, building the right product regardless, and staying alive long enough for the timing to work.
AI as the New Deep Blue
Chess has lived the AI inflection point that every industry is now facing. When Deep Blue beat Kasparov in 1997, the narrative was that chess was finished. It wasn't. AI made humans better players, elevated the game, and generated entirely new interest. The computers became tools for preparation; the contest remained human.
The difference today is that in most industries, the computers don't stop at the edge of the board. They go all the way. Entry-level legal work, data analysis, software engineering — AI is absorbing knowledge work at a pace that has no analogy in chess. The game was always human-to-human at the moment of truth. Most industries no longer have that constraint.
The Chess.com prescription — and implicitly the right model for any company navigating this — is human-centered AI. Keep humans in the loop. Focus on re-skilling over elimination. Let teams find their own way into AI tools rather than imposing top-down mandates. The same bottom-up approach that built the product is driving the AI adoption.
The Only Scorecard That Matters
Chess.com's journey from a bankrupt domain purchased at an auction to the world's preeminent chess platform is not a story about TAM analysis or return multiples. It is a story about founders who refused to optimize for the wrong things, found investors willing to back their mission rather than override it, and built something with genuine staying power precisely because financial success was always the byproduct — never the goal.
Money is not the end game.
The companies that survive their own AI moment will be the ones that remember the same thing.
