Dan Teran Raises $75 Million For Gutter Capital's Second NYC Accelerator Cohort

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Why "the best founders don't need help" is wrong:

"Everyone needs help. What a crazy thing to say, that the best founders don't need help.

Don Valentine famously, when Nolan Bushnell introduced Steve Jobs to him, said, “Why did you send me this renegade of the human race?”

And he introduced him to Mike Markkula. And without Mike Markkula, we might not have an iPhone. You see a similar thing play out at Google with Eric Schmidt, when John Doerr gets involved.

It’s silly to say the best founders don’t need help. History tells a very different story. If Steve Jobs isn’t the best founder, then I don’t know who is.

Investors like to say the best founders don’t need help. But often what they’re saying is they’re not interested in doing the work to help founders.

Or they’re not qualified to. A lot of investors are not qualified to help founders.

They definitely don’t need help from somebody who’s never really done a relevant thing. But do they need help hiring an engineer, finding co-founders. If you can pull that forward a quarter, could it change the trajectory of the company? For sure.

It also depends who we’re talking about. Some founders do have a ton of experience, and they probably don’t need my help, but that’s not really the archetype of founder we’re typically investing in.

Even in our case, we’ve funded second-time founders, and they don’t need help. But they certainly appreciate it. And it’s certainly impactful to the business when we can pull in the right customer at the right time, or the right investor at the right time.

So it’s lazy and self-serving to say the best founders don’t need help. And it’s a pretty poor strategy for a venture fund to brand themselves as not willing to do anything."

Turner Novak 🍌🧢@TurnerNovak

New @ThePeelPod with Dan Teran at Gutter Capital

Fresh off of selling Managed By Q to WeWork, Dan and friend @chess_is_ok started Gutter Capital during the depths of COVID.

It has evolved into one of the scrappiest early stage funds in NYC, culminating in Elbow Grease, a hands-on accelerator based in the heart of the city.

They just raised another $75 million to run their second cohort and put 15 teams in one building on Canal Street and help hire their first employees. (They’ve hired over 100 people for companies in their first two funds!)

We talk about why the best founders want help, how portfolio concentration makes investors more hands-on, selling Managed by Q to WeWork, going big-wave surfing with Adam Neumann and Laird Hamilton to close the deal, how raising a fund was harder than selling a company, and why he thinks startups should form a board and use OKR’s from day one.

Thanks to @numeral, @FlexSuperApp, @Amplitude_HQ, and @merge_api for supporting this episode!

Timestamps: 0:00 Elbow Grease: NYC’s scrappiest accelerator 7:39 Building a small, hands-on, in-person experience 13:39 Recruiting 100 people into portfolio companies 16:25 Portfolio concentration makes investors more helpful 24:58 Why raising Fund 1 was so hard 28:08 Advice for new fund managers 30:30 “Hiring today is as competitive as ever” 32:23 Selling Managed By Q to WeWork 35:23 “Never raise too much money” 39:43 Almost buying his company back from WeWork in Feb 2020 43:50 Starting Gutter Capital in the depths of COVID 49:34 Funding angel investing with gambling proceeds 52:39 Behind the name “Gutter Capital” 54:49 “Raising a fund is like getting punched in the face” 59:03 Writing long LP letters 1:06:45 Investing in real world problems 1:09:48 What a Gutter founder looks like 1:12:46 How Gutter makes new investments 1:18:41 Importance of customer calls at pre-seed 1:21:59 Evolution of NYC tech over last 15 years 1:26:15 Why you should form a board at Seed 1:28:29 How to run a Seed stage board meeting 1:34:04 Sharing carry with portfolio founders 1:35:56 The best founders need lots of help 1:39:30 Big wave surfing with Adam Neumann and Laird Hamilton

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Turner Novak 🍌🧢@TurnerNovak

@ThePeelPod @chess_is_ok Links to stream

YouTube: https://youtu.be/qz0ZgHZxlBY Spotify: https://open.spotify.com/episode/3d1YOMUnFWSVVP0781uxQj Apple: https://podcasts.apple.com/us/podcast/inside-elbow-grease-nycs-hands-on-accelerator-dan-teran/id1694440669?i=1000773250643

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Hira@Hiraweb3

@TurnerNovak @ThePeelPod @chess_is_ok Elbow Grease sounds like pure startup fuel.

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Turner Novak 🍌🧢@TurnerNovak

@ThePeelPod @chess_is_ok Elbow Grease applications are open until July 31st

https://elbowgrease.cc

Turner Novak 🍌🧢@TurnerNovak

@ThePeelPod @chess_is_ok Links to stream

YouTube: https://youtu.be/qz0ZgHZxlBY Spotify: https://open.spotify.com/episode/3d1YOMUnFWSVVP0781uxQj Apple: https://podcasts.apple.com/us/podcast/inside-elbow-grease-nycs-hands-on-accelerator-dan-teran/id1694440669?i=1000773250643

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Turner Novak 🍌🧢@TurnerNovak

@Hiraweb3 @ThePeelPod @chess_is_ok revenge of the Greasers

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Ian Gray@ian_gray

@TurnerNovak Valentine’s jab isn’t “help is bad.” It’s “stop treating introductions as advice.”

People can give context, but the founder still has to decide what’s true, what’s worth building, and what to ignore.

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