the inventors residency of san francisco

Great session with @khailee of @500GlobalVC on the Physics of Fundraising at @theresidency today. Here are my notes, expanded. Why listen to him Khailee has three vantage points. First, scrappy founder roots in a capital scarce environment, which created a bias toward cash flow, zero cost user acquisition, and frugality. Second, twelve years as a VC across multiple cycles, sitting with founders through the highs and lows of assembling rounds. Third, he fundraises constantly himself, so he lives the follow up and momentum game. The core metaphor Fundraising behaves like physics, with pushes, pulls, and timing. Founders who appear to be “naturals” are usually just fluent in those forces. You can learn that fluency. 1) The ladder strategy Do not open with your dream firms when your round is empty. Walk up the ladder. Start with easier checks, angels, smaller funds, relevant programs, and non-dilutive money. Build committed capital and social proof, then approach your top targets with momentum in hand. After you land a top name, walk back down the ladder to close fence sitters. Momentum creates urgency, an empty round creates stall. 2) Combination locks Every investor has a unique code. Pieces of the code include thesis fit, stage preference, fund cycle timing, past portfolio wins and scars, the partner’s angle, even mood and bandwidth. A “no” often reflects their combination, not your worth. Replace victim language like “I got ghosted” with diagnosis, then update your approach. Curiosity beats bitterness. 3) Founder runway beats company runway If the founder’s energy is depleted, company runway is irrelevant. Protect your tank. Sleep, movement, food, supportive people, a way to reset. If the process drags, you can still win if you preserve energy and perspective. If you burn out, you are out of time regardless of cash in the bank. 4) Simultaneity Do not pause your company while you raise. Keep shipping, selling, and forming partnerships during the process. Returning to an investor after two months with the same numbers signals dependence on capital. Returning with progress signals you know how to turn dollars into growth. Design your environment to switch contexts on purpose, not by accident. Use your team and advisors as extensions of your brain. 5) Cellular integrity Say only what you can stand behind fully. Investors have finely tuned spin detectors. Authentic beats theatrical. Be precise about what you have, what you learned, and what the next check unlocks. This builds trust now and reputation later. 6) Signals, not theater Pedigrees and logos can open a door, they do not build a business. Oversignaling is noise. Share real proof points instead. Conversion and retention that are moving the right way, early payback tests, unit economics trending in the right direction, credible customer anecdotes tied to numbers. 7) Timing and momentum Categories have seasons. When your category heats up, lean in, compress your process, and consider taking more capital since the window can close. When you are out of season, get even more combination driven and scrappy. Either way, move with intent. 8) Build the fundraising muscle Reps turn drama into process. Systematize outreach waves, crisp follow ups, learning loops after each call, and weekly progress broadcasts. Treat each interaction as data to refine the deck, proof points, and target list. Conserve energy. High activity is not the goal, effective activity is. Practical playbook I am taking away Preparation • Map investors from easy to aspirational, then plan waves. • For top targets, write a quick hypothesis of their combination. • Define a progress plan you will pursue during the raise, independent of capital. Execution • Climb the ladder. Collect smaller commits to create social proof and urgency. • Time outreach in a tight window so people feel momentum, not drift. • Keep a visible drumbeat of progress that others can reference. Communication • Lead with truth. What is working, what is not yet working, what the money unlocks next. • Offer crisp metrics and milestones, not vanity signals. • Ask directly for check size, process, timeline, and diligence needs. Closing • Once a lead or top logo is secured, loop back to fill the round. • Protect founder runway with clear boundaries and recovery blocks. • Close fast. Prolonged raises drain energy and weaken narrative. Watch outs • Waiting for money before moving, progress is the strongest signal. • Personalizing rejection, decode combinations instead. • Defining success by logos, define it by leverage and learning. • Slipping into bitterness, it kills momentum and relationships. Lines that stuck with me • Fundraising is a ladder, walk up with easy checks, then down to fill. • Every investor is a combination lock, find the code. • If the founder is out of energy, the company is out of time. • Progress during a raise is the clearest proof you will use capital well. • Authentic composes better than theater, in the room and over the long run. Grateful for the session, lots to apply immediately.