Inside Elbow Grease, NYC's Hands-On Accelerator | Dan Teran, Gutter Capital

**Turner Novak** (0:02)
Dan, welcome to the show.

**Dan Teran** (0:04)
Thank you. So excited to be here.

**Turner Novak** (0:06)
You guys just announced something. There's pretty big news. What did you guys just announce?

**Dan Teran** (0:09)
Yes. So we announced earlier this week that we have closed our third fund. So we raised a $75 million fund three. And as of this week, applications are open for Elbow Grease, which is our accelerator based in New York City. We ran the first cohort earlier this year, started in January, was a huge success.
And so we decided that we needed to do it again. So applications are open right now, and they'll be open until about August.

**Turner Novak** (0:39)
So why start an accelerator? Like there's literally 100 accelerators and people just kind of make fun of, why there's so many accelerators? Like why start one?

**Dan Teran** (0:47)
Yeah. I mean, I think it's a good question. For us, this was about a year ago that we started thinking about it.
Well, a couple of things. One, we saw companies today are just able to do a tremendous amount with very little resource. And so for a venture capital firm and an early stage venture capital firm, I think we found ourselves asking the question, how do we make the argument to founders that they should partner with us? I think a lot of our industry should be asking themselves that question. Yeah, that's right.

**Turner Novak** (1:12)
A very fair question. Yeah.

**Dan Teran** (1:13)
And a lot of investors go out of their way to say they actually don't add value. You know, they say the best founders don't need help. You know, we're going to stay out of your way. And that's fine. But in a world where you don't need capital to get to a million in ARR, and therefore, you don't need capital at all in a lot of cases, that's a really fraught pitch. And so, you know, we see even since we started the first program, you know, seed prices continue to explode. I think I saw they're like 25, 30 posts now, which is, you know, more than double where they were a year ago, which is just like that's what happens when you don't need money to get serious traction. And so for us, like a lot of what we were thinking was, how do we make sure that we're relevant to founders at the earliest stage in their journey? And then the other piece is, you know, as a firm, we are very hands-on by nature. So a lot of our companies work out of our office down in Canal Street. We do a lot of the recruiting, building the early teams.
And so we're kind of doing a lot of this hands-on work already.
And when you do that and you step in at the seed stage, often you're stepping into a lot of decisions that have been made without you at the table. And so for us, you know, our thinking was, why don't we just get involved as early as possible in the, in the journey of the company and be a part of those early decisions, you know? And if they're good decisions, great. And if they're not, then we'll help resolve them. But we just found the earlier we get involved, the more impact we can have on these companies. And so, you know, the only way that you can really attract people at the first kind of instance of company building is a program like this.

**Turner Novak** (2:39)
And the name sounds pretty apt then, Elbow Grease. Like, you're getting your elbows greasy, I guess. You're rolling up your sleeves, actually.

**Dan Teran** (2:47)
Yeah, we found it's on the website, but we found this amazing. I was kind of figuring out names for the accelerator, and it came across this quote from Andrew Marvell in like the 1600s. And it was the first instance of Elbow Grease in the English language. And he says, like, a few brawny fellows in the corner with mere ink and elbow grease are worth more than a thousand systematical divines with their sweaty preaching. Something like that. It's pretty close.

**Turner Novak** (3:10)
Interesting. And so he's just probably made that phrase up.

**Dan Teran** (3:15)
Yeah, it was like from a poem or something. And we just thought like, wow, that feels like very gutter, like very essential to our brand. Yes. You know, mere ink and elbow grease.
And so it stuck. That was the name that we went with. And, you know, now there's like an identity around it. The founders call themselves greasers. It's, you know, taken on. Yes, there were not ours. It's taken on a life of its own and it's a lot of fun.