Tandem Entrepreneurs Opens the Anti-Y Combinator

In Silicon Valley, where yacht-sized start-up incubators attract the most attention, Tandem Entrepreneurs is building a Jet Ski.

The four-year-old mini venture firm said its strategy runs counter to the Y Combinator-led trend of maximum number of companies and minimum investment dollars.

Tandem plans to select eight start-up eggs — in this case from the mobile arena — put them in one basket, and watch them carefully.

Tandem co-founder Doug Renert said he hears from start-up founders who complain that they don’t get enough hands-on time with the network of advisers at other incubators.

Calling out the elephant in the room, Renert said, “At [Y Combinator], those companies get three months in [the incubator], and get shot out, to figure it all out.”

Tandem may take issue with the big orange incubator’s tactics, but there aren’t too many people saying the model is badly flawed. Y Combinator did, after all, just spread to larger digs and is currently hosting its largest class ever.

So what is Tandem’s better deal?

Renert explained that in exchange for the standard convertible note and 10 percent of the common stock, companies in Tandem’s next class would receive “$200K, to start, and six months in our new incubator space.” Which, he added with zeal, is a snazzy little Victorian home in the Peninsula.

Tandem calls its model “muscle capital,” which seems to mean its advisers will be far more active and participatory than just offering the occasional coffee date. Renert gave an example from a previous class, in which Tandem’s staff acted as the business end of a mobile gaming start-up so the founders could focus on software development.

At the very least, Tandem’s founders should be able to provide a voice of experience for navigating the recently bubble-icious tech scene; two of Tandem’s partners co-founded Webvan, which vies with Pets.com for first place in the category of “most iconic collapse of tech bubble 1.0.”

Tandem’s test, bubble not withstanding, will be to see if it can leverage the extra “muscle” and capital to make “smaller” more profitable.

After all, the only difference between “small” and “exclusive” is smashing success.


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