HF0 founder Dave Fontenot on building a distraction-free residency where repeat founders hit $3M ARR by demo day
Jun 20, 2025 with Dave Fontenot
Key Points
- HF0's Dispatch batch saw 40% of teams hit $3M ARR by demo day, with post-demo valuations averaging $50.3M, targeting repeat founders who have already built companies to $10M-plus revenue.
- The program strips away commitments and habits that keep successful founders busy on secondary priorities, betting that their blind spot is the actual critical problem.
- Open Router, founded by a second-time YC alumnus who nearly abandoned his thesis mid-batch, now routes trillions of tokens weekly and ranks as the de facto LLM usage standard.
Summary
HF0 (HFZ), the San Francisco-based startup residency founded by Dave Fontenot, is producing outlier outcomes by targeting a demographic most accelerators ignore: experienced repeat founders. In its most recent batch, called Dispatch, 40% of the 10 teams crossed $3M ARR by demo day, and the average post-demo-day valuation hit $50.3M, implying a sub-20x revenue multiple on companies with real traction. Three batches run per year, always capped at 10 teams.
The founder profile is unusually senior. Roughly 70% of backed founders have built a previous company to at least $10M ARR. In the Dispatch batch specifically, five of the ten founding teams had either previously built a billion-dollar company or scaled a prior venture past $100M in revenue. Sixty percent of backed teams include a founder with a child, underscoring how far this cohort sits from the traditional first-time founder archetype.
The program's core thesis is subtraction, not addition. Where most accelerators compete on value-add, HF0 calls its framework "recursive subtraction," stripping away advisory commitments, angel investing, speaking engagements, and operational management habits that repeat founders accumulate after their first exit. Fontenot argues that the most important problem in any early-stage business is usually a blind spot precisely because founders are skilled enough to stay perpetually busy on the second through tenth most important priorities.
Open Router is the program's marquee proof point. Founder Alex joined HF0 in fall 2023 as a second-time founder, having previously built OpenC through YC. At the time, the prevailing consensus was that one dominant model would capture the market. Alex took the contrarian position that a long tail of models would coexist, nearly abandoned the thesis mid-batch, but sustained it through the peer environment. Open Router now routes trillions of tokens per week and operates the de facto usage rankings for LLMs at openrouter.ai/rankings.
HF0's origins trace back to a program that launched February 15, 2020, in New York and was shut down two weeks later due to COVID-19. Fontenot flew to Taiwan the same night, spent six months learning Mandarin and building political relationships, secured visas, and ran the first full batch there. Subsequent batches in Miami, co-organized with Lucy Guo, co-founder of Scale AI, preceded a permanent move to San Francisco timed around the launch of ChatGPT. Since relocating, approximately 35,000 teams have started the HF0 application.
The current batch includes Conduit, a brain-computer interface startup that, within the past week, achieved a claimed first in reading pre-verbal thoughts via a non-invasive helmet before they are converted to language. Fontenot describes the breakthrough as emerging during the batch itself, framing it as an example of the compressed timeline the residency format enables.