Techstars, the prominent twenty-year-old startup accelerator, unveiled updated investment terms for its accelerator program, raising the total startup funding to $220,000. Starting with its fall 2025 cohort, startups admitted into Techstars’ three-month program will receive a significant increase from the previous investment amount.
The revised financing structure will be distributed in two parts: Techstars will offer startups $20,000 in exchange for 5% equity; in addition to this, each startup will receive $200,000 via an uncapped SAFE note featuring a “most favored nation” clause. Essentially, this SAFE note allows Techstars’ equity percentage from the $200,000 investment to be determined by the startups’ future valuations during subsequent financing rounds. For instance, if a startup’s next funding round is valued at $10 million, the $200,000 SAFE note would translate to 2% equity, making Techstars’ total stake in the company approximately 7%.
This move closely aligns Techstars’ funding model to that of Silicon Valley’s renowned Y Combinator (YC), which revised its own funding structure three years ago. YC currently offers participating startups $500,000, consisting of $125,000 for 7% equity and an additional $375,000 via a SAFE note.
Determining which accelerator offers the more beneficial terms depends predominantly on the cash requirements and valuation goals of individual companies. While Techstars provides less total capital relative to YC, startups enrolled in the Techstars program sacrifice less equity. Conversely, Y Combinator gives entrepreneurs a much larger initial funding pool, but requires a higher equity percentage in return.
