Techstars, an established startup accelerator with nearly two decades in operation, has introduced revised terms for startups participating in its three-month program. The organization will invest $220,000 in companies starting with its fall 2025 cohort, an increase of $100,000 from its previous investment amount.
The investment is structured into two parts. Techstars will provide $20,000 in exchange for 5% equity in the company. Additionally, startups will receive $200,000 through an uncapped SAFE note embedded with a “most favored nation” clause. This means Techstars’ percentage ownership from the $200,000 SAFE will depend on the company’s future valuations. For instance, if a startup’s subsequent financing rounds value it at $10 million, Techstars will acquire 2% equity from the SAFE, totaling 7% ownership overall.
These new terms align more closely with those of Y Combinator, a prominent Silicon Valley accelerator. Y Combinator updated its funding terms three years ago to include a $375,000 SAFE note in addition to its standard offer of $125,000 for 7% equity in a startup.
The comparison between the two accelerators’ offerings reveals that the more favorable deal hinges on the startup’s capital requirements. In contrast to Techstars, startups at Y Combinator receive over double the funding but relinquish a larger portion of equity.
