After my last company was acquired, I found the time to look at the world around and I was quickly came to realize that it’s a perfect time to start a company. Traditionally startups have required teams of 15-20, two+ years and millions of dollars before they have their first hundred users. There was a new class of startup that could, with a few people and a small pot of capital get to that kind of traction in months. However traditional forms of early capital were not structured to participate in such startups. The startups did not need the kind of money that was normally invested by these firms and most would not see the kind of exits that traditional early capital considered viable.
I concluded that what was needed was a different form of entrepreneurship and not a different form of capital. This led me to set up Tandem Entrepreneurs.
We invest our sweat and usually less than $1MM in a startup over a period of 2 years working in tandem with the founders. We are much more like Y-combinator than Sequoia. We don’t consider ourselves a VC like Sequoia because we work so closely with founders and view more modest exits as a success. We love Y-Combinator’s approach, but they just help a company get out of the gates. We engage for a much longer period and happen to invest more time and money in each business.
Take a look at our website tandementrepreneurs.com that has more detail. I would love to get the thoughts of the venture woods community. We would also love to hear from founders who would like to work with us.
- Muscle Capital : Delivered - May 22, 2013
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liked the logo, and the drawings ….
the concept is very powerful. Indian market needs it the most.
Great idea. Leaning on Y-Combinator model would mean each founder being valued at around $6,000 (Rs.240 k) or so as Paul Graham does. It means founding teams with fully bootstrapped ideas can approach them for strategic support than financial.
Seeking to `hire’ individual `founders’ (even if they come without an idea / team / capital) purely for their domain expertise is quite innovative – especially since Tandem’s three founders cannot be expected to have unlimited strategic bandwidth, towards diverse projects that may get pitched. While this would help build Tandem’s in-house incubation team, the `hands on’ involvement will be restricted to scanning periodic reports from the hired founder to Tandem on the progress of the project under him. Wouldn’t the Tandem advantage (of closely working with the team) be jeopardized that way since there exists a scope for conflict of interest – loyalty of a hired founder getting divided between the team (that he lives with) and Tandem bosses (that have little at stake except $6000 per founder) living miles away ?
The success of this model depends on more `founder hires’ to manage more incubatees and still stay focused. It will be interesting to see the sustenance of high degree involvement with limited bandwidth of resources and greater number of projects. This being a criticism faced by Y Combinator that still remains unaddressed.
All the best !
Fabulous stuff. I loved your site – the drawings are cool. And your concept is indeed simple to grasp: Lower investments, lower exit valuations and lots of participation.
A question there – do you only invest in US companies? Given your social capital and physical participation I get the impression you would shy away from investments that aren’t in the bay area – that right? Just checking, as I’m in India, looking to serve the Indian market.
I’m preparing a business plan for something that we can project a 25-50m Exit value for, but anything of the sort of 100 million plus requires some imagination and a lot of religion. The catch-22 is that VCs wouldn’t want in for lower, so we have to ask for more money and project a higher exit; and the $1-1.5M that would take us through is a little too much for the average angel. It’s good to see investors such as Tandem come along and fill that gap. More power to you!
Hi,
I have a question for you. You are based in California. Can you give an idea as how are you going to corrdinate your investment in companies based in India . ?
This is a great concept. Much needed and suited for Indian market full of young entrepreneurs trying to make the most of the wide open opportunities.