

Tandem Entrepreneurs -- seed investors - vegashacker
http://www.tandementrepreneurs.com/

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DougR
I'm one of the guys at Tandem and am glad to see the discussion here. As some
posts have pointed out, we explain our approach in detail on our site:
<http://www.tandementrepreneurs.com>. To clarify things a bit more...

1\. We're not a VC. We're all entrepreneurs and love building businesses. We
put in our sweat first and foremost and happen to invest sufficient capital as
well. We only invest our time and money where we can add value.

2\. We offer deep business development and technical skills and an extensive
network. We work as the extended team so the startup can stay small but still
have the right quality and quantity of talent.

3\. We love the YC approach of supporting entrepreneurs and drew inspiration
from their model. That being said, there are some key differences. Namely, we
get actively involved in each business. We invest funds to carry the company
for two years to a potential exit or to a high growth trajectory. And, like
YC, we leave open the possibility of a small, early acquisition as exit. As we
all know, this is a likely outcome these days, even though the VCs don't like
them.

4\. Because of our involvement we can get involved with founders whose plans
are still nascent, and sometimes we'll help put founders together on a
business. To us the entrepreneurs are more important than the idea itself.

5\. We typically look for technical founders who have a knack for
understanding what their users want and then delivering it quickly. We don't
encourage outsourcing development unless it's just for commodity components of
the overall service.

6\. We don't consider anyone a "reject" because a fund passed them by. We'll
evaluate each team and business on its own merits and go for it if we like the
people, think we can add a lot of value, and believe we can build a valuable
business together. Obviously, each group of founders has to decide the same on
its side.

7\. Tandem is brand new, but we have a lot of experience at building startups.
We've made two investments thus far and with three principals only plan to do
about 6 per year. In many ways, Tandem is a startup itself in that we're
breaking the traditional model, having a blast, taking encouragement and
support with open arms, and proceeding full steam ahead regardless of what
certain "established" parties in venture finance say.

8\. We are happy to entertain folks that have gone through the YC process as
well as those that are entering it. In fact, we're attending the YC demo day
next week.

Best of luck in building your own startups, and we'd love to hear what you
think about Tandem. Feel free to contact us if we can help.

~~~
staunch
Sounds very positive. The really important thing that isn't addressed very
well is how you want to add "sweat".

Most entrepreneurs are interested in having the final say. Real control over
product development, marketing, etc. Is your attitude that your team is there
to help when necessary but otherwise hands off or do you insist on being
involved in day to day operation?

Would you mind clarify this a bit more?

~~~
DougR
Sure. How we add sweat is very subjective and is much easier to answer in
context of a particular business. It tends to be very clear on all sides by
the end of our first meeting. That being said, here is a high level answer and
a couple of examples...

We are entrepreneurs, and as such just do what is needed. If we don't believe
we can add value to a business, we don't get involved. We insist that the
founders control the various aspects of the business, but we also look for
opportunities that need our support on a day-to-day basis in the beginning.
Once the business has some level of traction, we step back and make ourselves
available when and where you need us (including help on large strategic deals
or even to sell the business). If you don't need or want our help and are only
looking for money, we are not the right fit.

The key elements in execution are - the right thing to do, the right time to
do it and the right way to do it. We participate with the founders to help
make these decisions on both the technology and business sides. We help where
needed on strategy, marketing, bus dev, and tech architecture and provide the
infrastructure needed on the administrative side (legal, finance, pr, etc.).

Couple of real life examples. In one of our businesses, certain technical
scalability issues were identified and the question was how to solve them and
when to solve them. We got involved and were a valuable resource for the
founders as we understood the business objectives, development resources and
the underlying technology. If need be, we can tune queries and look at code,
but most of the time acting a good sounding board is all that's required.

In another case, there was a key question on the initial go-to-market approach
for the business. Here, we brought people from other related organizations to
the table to help in our decision. We worked with them and the founders to
make an informed choice. So far, the results have been very positive...

------
myoung8
Without saying it on their website, Tandem is just another incubator. I would
be skeptical of this type of setup.

A friend of mine has dealt with a similar company in Mountain View that shall
remain nameless. At first things were going well, then they wanted to
outsource the development to India, then they wanted to take 50% of the
company. Needless to say he didn't sign with them.

Not all incubators are bad (YC, obviously, isn't), but the bottom line is
don't get caught up when numbers with a bunch of zeros on the end get tossed
around.

Think hard about their value proposition. If they even mention outsourcing the
development, just walk away.

------
richcollins
Tandem is funding our company. At first I had reservations about a hands-on
approach: "I'm an independent, iconoclastic programmer! Just give me my money
and get out of my way!"

Now that I am over my ego, I have really come to appreciate the fact that I
have to give minimal thought to legal, accounting ... etc. It is also really
nice to get immediate assistance with strategic, technical and networking
(social, not computer) issues.

I would be happy to answer any questions people have about our experience with
them. Either here or via email (richcollins@gmail.com).

------
yubrew
It would be nice to know more about their portfolio, such as the companies
that have gotten funding from them and achieved a liquidity event.

~~~
vegashacker
According to this post

<http://news.ycombinator.com/item?id=40412>

the news.yc user "blored" got funding from them. And blored's profile
(<http://news.ycombinator.com/user?id=blored>) suggests that their site is

<http://clutterme.com/>

_Edit_ : oh, you said "AND achieved a liquidity event". Yeah, don't know.

~~~
blored
_offered funding_ , we have yet to decide if we want to accept

------
vegashacker
Their FAQ (<http://www.tandementrepreneurs.com/html/how_we_work.html>) says,
"We typically invest $850,000 in a company over three stages."

------
nickb
Looks like they offer a lot of value. What percentage of the company do they
take and what's the valuation they typically expect? Do they offer more money
than YC?

------
vlad
Everything they said was nice until I went to their application and read this:

"Tandem backs existing and potential founders who combine strong technical
abilities with a keen understanding of their users and a deep passion and
energy for building services for fast-growing business or consumer
communities."

What the hell is that?

~~~
rms
They prefer to fund smart people who can build profitable services.

------
rms
If only they did biotech...

~~~
davidw
Convince them why they should:-)

~~~
rms
They should fund me because my company is a money winning proposition with the
$10,000 my partner and I put up but we could scale much more quickly with a
real investment.

We can't get any money from the traditional biotech establishment without
patents. And we can't get patents until we have some money because most of our
patentable ideas will require more expensive lab equipment than we have right
now. So for now, we try and make some money by bootstrapping and selling
incense, then we get the patents, then we get the real money, then we start
the interesting research like curing AIDS which offers a multi-billion dollar
payoff.

My company is selling a a genetic test for HIV immunity. With funding, we
could expand into other genetic tests very quickly and get FDA approval for as
much as we can. FDA approval is not required to sell a "home-brew" genetic
test but you can charge a lot more money if you're FDA approved because then
insurance will pay for it.It won't take much to dramatically undercut all the
existing genetic tests on the market, they're all really overpriced.

For now, I'm enjoying the process of bootstrapping and approaching biotech
with the Web 2.0 "make it yourself" ethos.

Seedcamp told me they don't do biotech. Techstars sticks to Web 2.0 function
companies. CRV doesn't do biotech. HCP does biotech and has a summer program
targeted to college students for it. We didn't get in and they didn't tell us
why, though it was still a really nice rejection and they invited us to a
barbecue at their office.

YC _might_ fund biotech if they liked you enough but they aren't a good fit
for me. The biotech incubator geographically close to me is dumb and I won't
give them any control of my company. They're one of those state-subsidized
institutions that repeatedly lose money. This is why Pittsburgh sucks for
entrepreneurs, because despite the brilliant biotech minds coming out of our
universities, there is not nearly enough investment money available.

I should probably email Tandem and ask if they do biotech. Anyone know any
seed stage funding firms/incubators that would consider biotech?

~~~
Leon
Ugh, I'm near the Pittsburgh area and I certainly agree - it's not the best
place for entrepreneurs. It's like the whole area is a "danger zone stay out"
for investment money.

Why is this? There are plenty of good Universities in the area - what is
Pennsylvania doing to hamper startup companies? Are people just drawn away to
other areas like DC?

~~~
ecuzzillo
Pittsburgh sucks mightily. I don't know anybody who would stay there given the
choice to move somewhere real, like the Bay Area or Boston or New York or LA
or San Diego or Chicago or Philadelphia or pretty much any kind of real city,
especially one near a coast. The only people I know of who choose to stay
there have been there so long that they've forgotten the taste of real food
(i.e. food that is not drowned in grease and has not been sitting in a
warehouse for three months) and the feeling of living in a real city with real
culture.

Now, people who invest generally have money. People who have money generally
have a choice of where to live, and are aware of what it's like to live in a
real city. Thus, they do not touch Pittsburgh with a ten foot pole.

~~~
pg
I grew up in Pittsburgh, and there are good bits around CMU. There are
definitely some bookish people there. It's not as bad as a completely random
town in the middle of the country.

The weather's pretty bad though. I was surprised to read a few years ago that
Pgh was one of the least sunny towns in the country. Then I realized why as a
kid I associated sun with being on vacation: when we were on vacation, we were
in other places, and everywhere else was sunny by comparison.

