TLDR: Day zero founders should optimize for a culture of execution before there’s even a team or an idea.
The vast majority of founders I meet are playing status games.
It’s cool to raise money. It’s cool to be a CEO.
I mean, not really though.
Those things might be temporary moments of validation at best.
Raising money creates a responsibility to your investors.
Being CEO creates responsibility toward your customers and employees.
The vanity of it all is temporary and the reality is actually steeped in accountability.
But the great founders I know, the ones who are mission obsessed, they see the vanity moments more as a necessary evil than a moment of pride.
They have clarity over the value they’re creating.
They live to drive impact for their users and customers.
They don’t overspend, but rather stretch runway to maximize impact.
They treat their cap table as sacred—optimizing for people and impact over brand and complexity.
And the list goes on. But what it boils down to is the fact that they’re focused on the system they’re creating rather than its sub-system components.
For founders who embody this deeply—building for the greater good, for the sake of building itself—there is a new venture capital model in town. The residency.
Historically you could raise friends & family money, but then you’re still building by yourself and you’re worried about losing money for the people you love.
You could go to a studio, but you’d be giving up 30-90% of your company on day one.
You could bootstrap, but it’s still lonely, emotionally exhausting, and a massive drain on your own bank account.
You could go and raise a seed round on a pitch deck, but then you’ve got investors you’re working for.
You could join an accelerator, but you’d still have to be 16 months into the journey on average because you’d need a product and pitch deck and some early signs of problem market fit.
You could go to grad school, but then you’re out of pocket a couple hundred thousand dollars.
All of these systems are good, but they also have their faults. Residencies do too. But like any industry, permutations exist for different subsets of customers.
And early stage VC is catching on and so are founders.
That’s why you’re starting to see programs like a16z Speedrun, Sequoia Arc, Neo, South Park Commons, PearX, EF, YC, and so many more cropping up. And these funds are shelling out all kinds of new deals… $500k-$1m for a pitch deck and a prototype.
Honestly pretty sweet right? They come with some level of community too.
But these are all still accelerators in my eyes.
The key differences?
Cash up front. The real truth about venture capital. It’s not your money. VC’s exist to find power law returns. Taking money from a professional isn’t a free ride just to play CEO for a few months.
Age of the company. What do you do before you have a team or an idea, much less a prototype? The average company admitted to an accelerator is over a year old already.
Cofounder matching. Where do you find people who are willing to come up with ideas together instead of recruit you for their own company?
Culture fit. What if you don’t like the investor and don’t want to work with them for 10 years?
There’s no blanket answer here—different founders need different things.
At a macro level, the rise of early stage funds who are supporting ambitious people to originate the next generation of innovation are a great thing for the world.
But, if I could wave a magic wand, all accelerators would turn themselves into residencies. It’s a much better alignment between LP, GP, and Founder.
LP capital is not sprayed around like trying to arbitrage a set of slot machines.
GP’s are forced to demonstrate value to win allocations.
Founders get exposed to many more smart people, get support far earlier in their journey, are part of a far more ambitious culture at true day zero, and don’t have the responsibility of managing someone else’s money until they’re ready.
All of these things enable a much greater focus on what matters—creating value for users and customers, creating things the world actually needs, and creating economic opportunity for the most ambitious builders in the world.
Before you take the leap to start a company, you should join a residency and not only make sure you want to spend 10 years of your life building, but develop novelty and founder market fit from day one while building in a culture of ambition and resilience instead of isolation and emotion.
See you Monday.