Tandem Entrepreneurs Pt 2

Folks, thanks for the comments and questions both on the blog and that were sent to me through email. I do appreciate the feedback and it is always welcome. I decided to answer the questions in a post as opposed to a comment and hope that is appropriate.

There were 4 main questions

1. Does Tandem invest in Indian companies/entrepreneurs?

Yes, we will invest in Indian teams as long as we add value. Typically, we can help if the business is serving a market beyond just India (with users and partners in other regions) or if the business is based on a model that we already know well. Technical and business discussion are more efficient with everyone in the same place, but we can still be very successful with geographic divide in place because the teams are so small and we partner only with motivated, self-driven founders. With this in mind, we look for all the founders all to be in the same place, but that place can really be anywhere.

2. How does the Tandem team spread its time across many companies?

We support two new companies per partner per year, so a Tandem company would typically have one or more Tandem entrepreneurs available to it on a daily basis. If we’re looking at competitive landscape, it may be Sunil, if there is a partner deal to be done, it may be Doug, if you have a performance issue it may be Joyo. There are times when all of us are pitching in and other days when none of us is required. In addition, we have many individual investors from companies like Adobe, Bebo, Google, Microsoft, Macromedia, etc who are available to help us as sounding boards and more. We also have service providers who will provide help in areas like finance, legal and public relations. These advisors and service providers will take their fees in stock, allowing us to extend our runway even further and still get great human capital.

3. How do you differentiate yourself from others incubator-like funding vehicles?

There are 3 things that differentiate us from these operations. We are entrepreneurs partnering with other entrepreneurs.

We will invest in companies and ideas that may not end up huge “hits.” We will try and make every company take the best and most lucrative path it can but will not force any to go down the path to extreme success if it’s only possible in a powerpoint.

We support companies all the way to liquidity, and we usually will not need any external money. Our investment of is tranched – the first tranche is for building (6 months), the second to get credible traction (6 more months), and the third is to scale (another year). If we do not invest fully in each tranche, we lose much of our equity.

We support independent companies – you are still founders of your company and not employees of tandem. You still bear the burden and enjoy the glory of building a successful business by understanding your users and delivering a service to them. We help you keep your focus on enrgy on the users.

4. When would you take an individual founder without an idea

Ideas are not that important to us. We have some, and there are many sources of inspiration these days. And even if you have one, it’s very likely that it will morph considerably once you implement it. So if you are a strong candidate, we’ll pair you up with others on a promising business.