Neil Patel

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Dan Teran took the leap from legal to tech, sold his company for over $200M, and then leaped from entrepreneur to startup investor. His venture capital, Gutter Capital, supports early-stage and mission-driven startups preferring to invest in the education, health, economic mobility, and housing sectors.

In this episode, you will learn:

  • The dangers of high valuations in early funding rounds
  • Success in M&A deals
  • Raising money to start your own fund


For a winning deck, take a look at the pitch deck template created by Silicon Valley legend, Peter Thiel (see it here) that I recently covered. Thiel was the first angel investor in Facebook with a $500K check that turned into more than $1 billion in cash.

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The Ultimate Guide To Pitch Decks

Moreover, I also provided a commentary on a pitch deck from an Uber competitor that has raised over $400 million (see it here).

Remember to unlock for free the pitch deck template that is being used by founders around the world to raise millions below.

About Dan Teran:

Dan Teran is the co-founder and Managing Partner of Gutter Capital, a New York City-based venture capital firm focused on building companies to address the most important problems facing the United States and the world’s liberal democracies.

Dan also founded Managed by Q, the world’s leading platform for workplace teams, which was acquired by WeWork in 2019. Following the acquisition, Dan served as Head of Corporate Development and Ventures at WeWork.

Dan has spoken at Harvard, MIT, NYU, and Parsons School of Design about the future of work, and has been recognized by the White House and the United States Department of Labor.

He has been named a leading entrepreneur by both Forbes 30 under 30 and Crain’s 40 under 40. Dan is an active investor and advisor to startups with a focus on advancing the American experiment through affordability, accessibility, economic mobility, and sustainability.

Prior to founding Managed by Q, Dan was a Partner at a venture development firm, Prehype, where he co-created startups with the world’s finest corporations and entrepreneurs. Dan began his career in community organizing and progressive politics in Baltimore and is a graduate of Johns Hopkins University.

Dan serves on the Board of Directors of Pursuit, a non-profit committed to helping diverse and low-income New Yorkers find their first job in tech.

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Connect with Dan Teran:

Read the Full Transcription of the Interview:

Alejandro Cremades: Right? Hello everyone and welcome to the deal maker show. So super excited about the guest that we have today. We’re gonna be talking about going from one side of the table to the other. So why you know without further ado. Let’s welcome our guest today Dan Tarran welcome to the show.

Dan Teran: Thank you Great to be here.

Alejandro Cremades: So you were ah born you know and raised in between l a and New Jersey so I was saying life growing up, give us how little if I walk through memory lane.

Dan Teran: Um, it was good. So my parents are both from New York city and the New York area I was born on the East Coast and then we lived in Los Angeles for a few years when I was a kid so I got lots of skating and surfing in and then ended up moving back to. A pretty rural area in central new jersey so that was a bit of a culture shift and haven’t really looked back since I left for for college. So I went to to school in Baltimore and then I’ve been in New York since

Alejandro Cremades: So what got you involved or interested into Let’s say you know working in the public sector and Urban areas and and and issues around them and so forth.

Dan Teran: Um, yeah, so I’d like I said I went to to school at Johns Hopkins and pretty early into my career there I was introduced to a city council member a gentleman by the name of Bill Henry who kind of became my my mentor in all things Baltimore City Politics for my time there. And I just got really fascinated with the city as sort of a microcosm for a lot of problems that exist in the world and and Baltimore in particular had its challenges and I thought it was a really interesting opportunity I didn’t grow up in cities and so moving to Baltimore was kind of a full-on education. Um. I think prior to that you know my family always had a very strong service orientation. So growing up I spent summers going to places like volunteering on a navajo reservation of norphanage in Mexico and I think my parents were very intentionable. Ah intentional about exposing me to the need that existed in the world and it’s always been. As sort of my my professional drive to try to apply my abilities to address some of those issues.

Alejandro Cremades: So so let’s talk about you know after doing the um, the senate campaign. You started working for aarin brokovvich you know obviously for many of the listeners. You know that name you know is going to sound familiar. You know someone that they. That really you know made the headlines you know made history. You know, ah, there was even a movie that was a a Julia Roberts the one that was the main character. Um, you know, but being you know Erin Brockovic so how was that experience of working with with someone like that.

Dan Teran: Yeah, so you know like you said after I graduated college I worked on a senate campaign in Baltimore I then moved to New York to take a job at a law firm as a paralegal and as ah, an organizer working alongside Aaron Brockovich and basically law firm had retained eraron to help organize communities that had been impacted by environmental catastrophes. So similar to her experience in Hinckley you know there’s communities all over the United States that have been ah somehow affected by corporate polluters and they don’t really understand what their rights are and so. It’s 1 thing for a law firm to show up and say they might be able to get some relief but when someone like Aaron comes and shares her personal story and of course some of them have probably seen the movie. It really helps to bring to life. Um, you know that there might be relief for people. So um, it was a privilege to get to spend a little bit of time with her. We worked on ah on a a case in. And Duncan Oklahoma where Halliburton had allegedly poisoned the groundwater and that was a case that um you know I believe ended up settling and getting relief for a lot of people so it was great to have an experience working with her.

Alejandro Cremades: Now for you. You know, really interesting stuff here because there’s like a shift in gears I mean you thought that you were going to be doing law school and then all of a sudden it sounds like this experience. You know like got you to distract yourself or maybe to make a decision against it. So. So What was that thought process.

Dan Teran: Yeah, well you know I mentioned that case and in in Oklahoma and you know the last time I checked like a decade later it was still being settled. So um I think what I saw working in politics in Baltimore and then working in environmental law. Um, you know. Obviously very early in my career and at a very junior level was just the pace at which decisions were made and the way decisions were made felt very 1 very slow but also very arbitrary and I got the overwhelming feeling that no matter how hard I worked the outcomes weren’t going to always be in my control when you’re dealing with. You know, especially entrenched politics in a city and then dealing with you know the the court system which can be capricious and I was living in New York this is like 14011 and I had friends that worked in startups and I was really captured by how quickly you know this was early days of New York Tech you could you know. Write some code ship a product and people around the world could use it the same day and it could change their life and when I saw some friends have some success with that I just thought like that’s that’s what I wanted and I I wanted to make a change in my career.

Alejandro Cremades: So Tell us about jumping into the startup world because I mean this is a little bit different from what you were experiencing like the law firms or the a politics where there’s like more like red tape and and and a different way of doing things. So. So was it like a big shock when when you started to experience the startup world.

Dan Teran: Yeah I mean so first of all like breaking into startups in New York even back then was was not a small feat like there is a long list of people who rejected me from jobs in and startups and in the New York community and so everyone from Google to foursquare to. Joe Markcasey who is a good friend who had a company called social vibe at the time that then became Truex undercurrent I applied to basically every startup in town and got rejected from all of them and managed to find a startup called artsicle which was a marketplace for emerging artists that had just raised money and convinced them to hire me as their first employee. And you know it was a very early stage business basically me and the two cofounders they had just raised a small angel round and it really was exactly what I was looking for in terms of a broad canvas to basically be able to take the reins and try different things I ended up ah building their artist community onboarding hundreds of artists in the New York area but also being able to learn product and product design I found a great mentor who taught me kind of basic product design and I came to the founders and said you know I have a vision for what the product should look like and what it should do and they gave me the opportunity to do that and then I ended up honing my skills and and and for a while worked as a product designer. Which ultimately led me to getting recruited at Prehype which was was pretty transformative for me. So I think ah I meshed well with an environment where I could have a lot of ownership and a lot would be expected of me versus an environment where maybe neither of those things were true.

Alejandro Cremades: And why why did you find it so difficult to get into the startup world.

Dan Teran: I mean I was just coming from like you know on paper I’d worked as a community organizer and I had worked as a paralegal I also was like 21 years old at the time I had left college early. Um, and so you know who who was going to hire me. So fortunately. Happened to live with a ah, very successful photographer who had lots of roots in the arts community and he actually he was one of my references that basically helped vouch for the fact that I’d be able to help them build their arts community. So pretty unrelated to the tech was how I got my first job in tech.

Alejandro Cremades: And pre-hype you know you were alluding to it. It was a venture studio you know companies like parkbox coming out of it and and for the people that are listening a venture studio. Ultimately, it’s where you come up with ideas you get the teams around it. You get some financing you know to get the. Thing going and then basically you let those ideas you know, become companies of their own. So How was that experience for you of being able to see so many ideas seeing you know the ones that had legs from the ones that didn’t have fair legs and and some of the patterns behind the ones that ended up being successful.

Dan Teran: Yeah, so prehype was an amazing experience. So I joined at the very beginning one of the hendrik werdolan who was the the founding partner at Prehype had just started barkbox with Carly Strife and Matt Meeker and so I had the opportunity to kind of have a front row seat and help out along the way with some of the things that was going on at Barkbox which obviously went on to be a public company but also Prehype had a really interesting model where it was a lot of product people and designers sort of made up the team and. To keep the lights on everyone took on corporate venture development projects. So we’d work with big companies to build new digital businesses. Um I worked with Newscorp mondeles unileverge sort of you name it and they would hire us to. Ah, basically incubate a new startup using their assets and distribution and then if they liked it. They could spin it out to raise venture or they could spin it in and run it internally or they could kill it. Um, and so what that did for me at still pretty young I was like 23 at the time. Um. Had a lot of exposure to just 0 to 1 rapid prototyping bringing products to market and I think like the maybe the biggest learning I guess two things we were working with these big companies and I realized pretty quickly that if they were going to listen to me like a 23 year old designer like nobody really knew what they were doing um and the second thing was um.

Dan Teran: You just have to be willing to kill the ideas that aren’t working and move on and so we cycled through a lot of things even when I started my company managed by queue we originally thought we were going to be working with a condo and co-op residential buildings in New York and after six weeks of pitching to them. We realized that it was a pretty miserable customer. Um, and to my cofounder Simon’s credit we just retooled the deck and completely pivoted the business to focus on office and I think it would have been a long and miserable road if we hadn’t been willing to to kill our idea and ah and change quickly.

Alejandro Cremades: So At what point do you realize? hey after seeing all this stuff all this innovation. All this ideas you know I’m feeling pretty good about this I’m feeling pretty good about this idea and then you know thinking hey I think that this idea is the one and I gotta go On. And and bring this to life which ended up becoming managed by q.

Dan Teran: Yeah, so um, basically my co-founder at managed Byqueue Simman Rahmanian who went on to find to found Roe or roman the direct consumer men’s health business. He had been working on this idea sort of. On his own for a little bit and kind of had gotten to the pitch stage of like this operating system for commercials or originally for residential space and him and I had partnered on a project for news corp which we built a language learning app for non-native english speakers business english speakers around the world and we launched that. And Mexico City and in Brazil and the business. The the project had a lot of traction and we were able to spin that back to to Newscorp and so it created a little bit of liquidity for for Simon and I and so basically we decided we were going to finish the project with Newscorp and start to focus on managed by queue and really. It was over the course of probably three or four months that we had this transition period and we decided if we could pitch to 20 customers and we can get 20 customers to say that we were going to they were going to pay us. We would stop everything else we were doing raise money and do it full-time. And when we so first went to market. We literally had a pitch deck. Um, so we’re basically selling vaporware simone was a very talented designer. So the deck looked great and um, you know we were able to sign. Um I think close to 20 customers. Um, to basically let us manage their office for them before we.

Dan Teran: Raised any money before we’d written a line of code before we’d even talk to the cleaners and so that was really we really went ah to ah a pretty far extent to validate um product Market fit and just like demand from the market before we before we threw in.

Alejandro Cremades: So then so then tell us about you know what ended up being the business model of managed by queue for the people that are listening. How were you guys making money.

Dan Teran: Yeah, so basically the the vision for managed by queue is an operating system for for the built environment for the office that could run the physical space with the reliability of software which as it turns out requires a lot of people to do and so we went through a few different business models over the over the years Initially it was a technology enabled service company so we had a at at its peak close to a thousand employees doing cleaning maintenance ons site and we had a stack of software that we built to manage the service operation and to to manage the client interaction. Over time we evolved that into a managed marketplace so we had thousands of local service companies doing cleaning and maintenance. But also it security administrative staffing basically all of the services that an office manager would manage and that was being managed on our platform. And we would take a transaction fee. So the office manager would put in a request would get bids from multiple vendors and they would ultimately transact on our platform and we would take ah a take rate on that on that service and then towards the very end we had built a full set of tools for the office manager so we acquired a french company that did. Ah, employee request management vendor management basically a set of tools for the office manager and that was just a traditional saas business model recharge the subscription fee. So at the end think of it as saas plus marketplace fees.

Alejandro Cremades: And how much capital Do you guys raise for the company prior to the acquisition.

Dan Teran: Ah, over the lifetime of the company including debt inequity like just under a $100,000,000

Alejandro Cremades: Okay, and why would you say that it was so hard to raise money at the beginning for the company. Okay.

Dan Teran: Actually at the very beginning we were pretty fortunate through prehype and through Henrik at Prehype we had a great network of supportive angel investors even at a time when you know there wasn’t a huge community of angel investors in New York and many of those people. Um, are now lps in my fund so people like Scott Belski who’s now chief product officer at Adobe was one of our early investors people like Jay Livingston who’s now the chief marketing officer at shake shack um, ah Josh Abramson who had had founded college humor. So. We had some great angels we didn’t raise a ton of capital. It was like I think 400K was our first round and then pretty quickly after that. Um through Scott Belski we were introduced to hunter walk and Saya Patel who had just raised their first fund at home brew and they they they let our seed financing that. You know, really change the trajectory of the company. So I would say early on we had like a pretty pretty blessed fundraising experience.

Alejandro Cremades: So at what point do you guys say encounter. There was a little bit tougher to to raise the money.

Dan Teran: I think as the business got more mature and like you know reality set in. We had raised early on at very high valuations and obviously like we’re seeing what’s happening in the market today. Ah raising at high valuations ah can make it much challenging more challenging for you later in the life of the business so it wasn’t really I think. You know series a we race pretty easily series b as well and then I would say later in the business. We’d grown to a pretty big scale but there was still some figuring out to do on on the business model and the capital efficiency of the business and I think ultimately you know we the business grew up in downtown New York and it was we had a worldview that every office looked like the office buildings in downtown New York which are largely class b and c unmanaged office space and I think as we got outside New York reality set in in terms of how different properties were managed and so I think ultimately the opportunity looked a little bit different than we thought when it was just um. You know the 2 of us on the idea.

Alejandro Cremades: So So at what point would you say that the idea of perhaps you know doing an acquisition of the company comes knocking and then walk us through you know the different sequence of events that needed to happen for you guys to. To to complete the acquisition by wework.

Dan Teran: Yeah, so we had we were in market raising for the next round of financing we had raised a series c at ah at a pretty high valuation and you know I think we we were coming to the realization that um. It was going to take a lot of capital to get the business where we wanted to go and we had already raised a lot of capital and you know I had met Miguel Mckelvey who was one of the founders of of wework a couple years earlier actually on ah a charity water trip in Ethiopia and Miguel had always told me I should come in and meet Adam and I had I had met him once. Um, and I thought he was ah kind of a crazy person. Obviously a huge vision lot of energy. Um, and you know as we started to raise this last round of financing I started to spend more time with Adam and he started to really pitch me on the vision of what it would look like to build managed by queue and realize our vision kind of under. Under the wework banner and obviously this is before the cracks were starting to show at wework and you know from where we stood. They were super well capitalized. They had a stellar brand and sort of the um, coworking and ah an office space. They were starting to press into this. What was it called built by we or powered by we. Ah, experience where they would do. Basically what we were doing for large occupiers and so we saw a really interesting opportunity to kind of complement sort of the wework offering where you’re in their space and they’re managing your space and the managed by queue offering where you can use sort of this asset light software and marketplace approach to managing any space and so.

Dan Teran: I Think part of it was there were you know the the writing on the wall in terms of the the capital markets and looking at potentially like a highly diluted financing but also at the time it just seemed like a really massive opportunity to accelerate realizing our vision on like you know the the greatest scale that we could imagine at the time.

Alejandro Cremades: So what was the yeah, what was that acquisition process like so.

Dan Teran: Um, basically it started almost a year and a half before it happened. So I think like my advice to founders that are you know thinking they might exit or might need to exit you know businesses are. Bought not sold and if they’re sold. It’s probably not for a price you like and you know it really requires developing a relationship with the buyer. Um and positioning yourself as sort of the answer to their question and that takes years of building a relationship and building trust and so you know Adam had made an offer a year prior to the acquisition. Um, it wasn’t it wasn’t interesting to us and I think over the course of the next year um it became you know we continued to execute on our vision. We continued to prove that we were the the team that he was looking for solving the problem he was looking to solve and then ultimately wework was willing to pay a higher price and then I think also. You know, part of the reason we got such an attractive valuation is at the time me personally and my management team filled some major gaps that were needed at the organization and so ah, yeah, it was ah it was a long process and I think like it was really built on kind of. Building a relationship and and ultimately figuring out how could how could we be the answer to their their question at the time.

Alejandro Cremades: So I believe that the um that the the acquisition was saying was announced to be about 220,000,000 and you know of this there was like different components. Um, and you know obviously as everyone knows we Work. You know, ended up a. Having a failed ipo which I’m sure that that affected every single company that they had a acquired because they had a really big valuation and they were using stock ah in order to complete and fulfill those transactions. So How was that for you guys. How would those events unfold and. And obviously you know I’m sure that you guys were Disappointed. You know with the events that were unfolding which were not the ones that you were promised.

Dan Teran: Yeah I mean obviously like it’s not the outcome that everyone had hoped for I think you know going into the acquisition. 1 of the things that I was really clear about was I wanted to make sure that the team that had built the company and helped us to get to where we were. Um, that they were not exposed to sort of the the the risk that I was taking by choosing to exit and obviously stock was a component of it. So I think one of the things that I am most proud of um in sort of the way the deal went down is my employees got paid all cash and they got paid all upfront. So. Anything that happened after that they were not subject to and I think that’s a big reason why a huge number of those employees still work with me today on the fund. Whether that’s you know as collaborators as lps as founders or as employees within the portfolio. Um, but yeah I mean obviously I personally. Um, was compensated in ah a large amount of wework stock. Obviously my investor is at the same proportion and I think fortunately for early investors. It was a big enough exit that everyone still did well um, but you know obviously. Ah, when a company goes through sort of the financial carnage that we we work went through and you’re holding any of that paper. It’s not going to feel great.

Alejandro Cremades: Yeah, and now obviously when the transaction happened you ended up heading up the a corporate development team helping with with transactions too and and obviously you know like. I’m sure that you learned a lot. You know, not only from what you experience, you know as as as going through this acquisition with wework but then also leading acquisitions for we work too. So What would you say you know have been your biggest lessons learned around M and a.

Dan Teran: Yeah I mean I think like um I would say that one of the biggest lessons is at a founder led or like very strong Ceo led company. Um, you know the m and a team you know for smaller deals they’re they might be looking for things that are kind of fit to a strategy. But I think. Often for the bigger deals. No matter what anyone tells you it’s like really the Ceo is in the driver’s seat and if they’re excited about a deal. They’re going to find a way to make it happen and justify it and if they’re not It’s just not going to happen and so I think like you know for companies that are thinking about selling making sure that you have that strong. Principle-to-p principal relationship and getting executive buy-in is important. Um, and then I think like the flip side of that is the strategy really matters and so you know I was also overseeing meet up conductor flatiron school a bunch of businesses that had been acquired and you know as you know is is now well known. Businesses were not a strong strategic fit to the business and they ended up being you know, divested for much less than they were required for when the business failed to go public and you know that that m and a. Ah, can be a very powerful tool for businesses but it it also can be kind of a shiny object and cause a lot of distraction and strategic drift.

Alejandro Cremades: So how do you think companies should think about M and a on the buy side in order to scale much quicker.

Dan Teran: Well I think like you know there there are forms of M and a when you’re acquiring sort of a direct competitor to to acquire a book of business like that’s a very different. You know if if it’s really just about growth that can be very accretive I think you know where it can be very dangerous is when you. Are using M and a to augment the strategy when you haven’t really solidified the core business in terms of ah you know product Market Fit Strong unit economics and really understanding how you’re going to evolve a relationship with an existing customer versus you know, acquiring new capabilities to engage a new customer in a completely different motion like. I Think that can be dangerous.

Alejandro Cremades: And I heard you earlier talk quite a bit about valuation. Um, you know? Obviously you were talking about valuation to Us. We’re thinking about the transactional side on the money side you were talking about Valuation. You know the way that you guys went through it. Ah the way that you had you know Also the high valuation at an early stage. Or higher valuations at an early stage going through those different rounds. Also what you’re seeing now you know in the current environment. How would you say that your perspective you know has shaped up you know around valuations over the course of time.

Dan Teran: Yeah I mean honestly like I was a perfect example of what I advised founders not to do early in the life of my company. You know I was like 24 when we started the company I had basically no business experience and i. Definitely viewed the higher price tag in the financing as sort of a sign of success and was completely blind to the fact that that can be really damaging and limit your options later on in the life of the business if it’s not rooted in in reality and I think like you know where we are in the cycle now this is. And this this is not a message that would surprise anyone. Um, you know there’s real repercussions when evaluation is not grounded in reality and it does real damage to a company when that has to be rectified. Um, you know, further down the line I think in my we got out by the skin of our teeth that managed by qe so I feel like ah you know we we. We ah, we managed to sell the business without having to do a downro or anything terribly dilutive I think in this environment like that’s just like that’s not happening and so founders need to be really careful about the about what they’re optimizing for in a financing because I also think the businesses that are trained on capital efficiency early. Um, habit just a huge advantage in the capital markets.

Alejandro Cremades: And what was that the the decision to leave we work because that was the immediate. Um, you know event that needed to happen for you to start what you’re up to now with gutter. You know, which is you know going on the other side of the table really? Ah, but they. How was that how was that process like at what point do you realize hey I think it’s time to go.

Dan Teran: Ah, well it wasn’t much of a decision on my end I got ah a phone call from ah the Cfo who had just become Ceo at about five o’clock in the morning saying we were thinking. It’s time for you to move on What do you think and you know it was it was in line with my expectation the last. Piece of work that I did for them was kind of putting together some scenarios to divest everything that I was um, overseeing and so I assumed they would be divesting themselves of me at some point I would say came a little bit sooner than I was expecting but um. Once the ah initial shock of being unemployed for the first time since I was 14 wore off like it’s but probably the the best thing that ever happened to me. Um, because like you said it’s you know, given me the opportunity to to focus on what I’m building now.

Alejandro Cremades: So talk to us about gutter. You know how did the idea of gutter. You know come to mind because I mean you are an operator. You’re an entrepreneur and you know here instead of building another company. You decided to build a fund to invest in in founders.

Dan Teran: Yeah, you know it’s funny like I’ve been doing it for over a year now. So I think the reality is set in that I’m running a venture capital firm. But I think I’m coming out of wework like the last thing I thought I would be doing was becoming a Vc. Um, and I think really. The way that it ended up happening was my partner James and I have been investing as angels since 2017 James and I went to undergrad together. He was doing his masters in computer science and machine learning. He had his own startup in the city that failed and to support himself. He started playing poker on the internet. And he ended up becoming one of the most successful daily fantasy sports player ever. He built a software-driven process to predict athlete performance and player performance and basically took all the money out of the game for 2 years so we started investing in 2017. We built a portfolio. Ah of about 100 angel investments together and we really enjoyed working with early stage founders. We really enjoyed learning about new types of businesses and so when I found myself suddenly unemployed. Um I was just trying to figure out what to do with myself and so I started reaching out to some of the companies I’d invested in. Um, you know in particular. Where there were mission-driven founders that didn’t come from the venture industry that I thought had really interesting insights and I you know wanted to be able to help them build their businesses. So um, two of those businesses are in the portfolio now 1 is called opus which is ah training software for frontline workers. Another is called bicky.

Dan Teran: Which helps restaurants understand their customer data. Um I basically just started working closely with founders ended up helping them recruit some of my former team members and I got a lot of joy out of that I also felt like we were doing something that nobody else was doing which was finding people who had a. Deeply held insight from industry but didn’t have a tech pedigree and that other venture firms might ignore but we felt like we could solve that like we knew how to build software product so we could bring in those people and we did that enough times that it just felt like um something we. 1 we’re really enjoying 2 from a mission and values perspective felt very aligned to kind of the impact we wanted to create in the world and 3 you know when you’re building a founding team and putting in all this work in the early days you don’t want to give away those economics to somebody else once you know the the hard early stage problems have been solved and so we wanted to put ourselves in a position where we could be. Ah, writing bigger checks leading rounds and being a ah more meaningful part of the company as they evolve.

Alejandro Cremades: And and in this case, you know Also for the people that are listening. What are the types of companies that you’re looking at investing as part of the gutter investment thesis.

Dan Teran: Yeah, so we have a belief that the biggest companies that are built today are going to be built in response to the biggest problems facing the United States and the world we view those problems as affordability for the average american mostly in healthcare education and housing second is economic mobility. And third is climate change. The reason that we believe these things to be true. Is we come from the ah the Warren Buffett school of never bet against the United States and if you believe that you have to believe that we’re going to solve these problems because any one of them threatens to undermine the United States and within those buckets we try to focus on ah software as a service businesses and ah marketplace businesses and that’s you know primarily because they are wonderful. Efficient business models and also I have a lot of experience building in them and you know when you look at what we’ve actually invested in to date. Um. We have a really strong thesis thesis around housing we’ve invested in a number of businesses to accelerate the supply of affordable housing in America we’ve invested a lot in electrification. Um, so things like heat pumps and ev chargers. We’ve invested in climate mitigation. So ah, waste reduction floodp plainin management. Scope 3 emissions reporting. So really It’s a pretty diverse portfolio and pretty generalist but like really the north star is ah are these companies taking ambitious shots on goal to solve the most pressing systemic problems facing the us in the world.

Alejandro Cremades: And how different has it been to raise money for this fund because now you’re announcing a $25,000,000 closing to start, you know those investments in companies which is exciting but how different has it been the fundraising for this fund versus the fundraising that you were used to as an entrepreneur.

Dan Teran: Yeah, you know it’s funny. Um it was a lot harder than I thought it was going to be um I had you know a lot of success raising as a founder I had a successful exit behind me. Um, and I thought that we were going to kind of like ah could sleepwalk and do a small fund and you know. It took over a year to raise it was hundreds of conversations and I joke with my partner that if someone had told me in October of 2021 that it was going to be this hard I might have stayed in bed. Obviously I’m I’m glad that I didn’t but I think like the 1 thing that nobody tells you is. When you’re transitioning from being a founder to being a fund manager. Um, really people don’t give you credit for for having a successful exit behind you. Um I think like there is a perception that the skills that it takes to be a great entrepreneur are just different from the skills that it takes to be a great investor and I think that. Is true in some cases but for the type of work that we do I feel like you know it’s a pretty strong match in terms of skill set. Um, but yeah, it was. It was a long process. It was a lot of conversations I would say and on the upside and you probably know this from from your work as well. When you are forced to pitch a million times and you have people constantly telling you why you can’t do it. Ah you get really clear on why you think you can and what your edges and I feel like over the course of the last year it really helped us to refine our investment thesis.

Dan Teran: And to refine what we thought are edges in a market that admittedly does have just a ton of seed funds.

Alejandro Cremades: Love it now. Question for you. There’s probably a lot of entrepreneurs that are wondering hey how do I reach out to Dan and. And perhaps you know like share what I’m up to or get my feedback on what I’m up to because what I may be doing you know could be a perfect fit with his investment thesis or what what is the best way for them to reach out and say hi. Thanks.

Dan Teran: Yeah, so um, our website is ww wwww dot gutter dot cc and our contact information is on there. You can also find me on Twitter at dp turan I’m also on Linkedin. So yeah, we we love to hear from people. Um, we’re a small team so sometimes it takes us a little bit to respond but we do make a point to get back to everyone that reaches out with ah with a personal message.

Alejandro Cremades: Amazing, amazing! Well hey Dan thank you? So so much for being on the deal maker show today. It has been an honor to have you with us.

Dan Teran: Yeah, thanks so much for having me great to see you.

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