Techstars, an established startup accelerator with nearly two decades of history, has introduced revised investment terms for startups participating in its three-month program. Beginning with the fall 2025 cohort, the organization will increase its investment to $220,000, which is $100,000 more than its previous offering.
The investment is broken down into two components. Techstars will provide $20,000 in exchange for 5% ownership in the startup. Additionally, startups will receive $200,000 through an uncapped SAFE (Simple Agreement for Future Equity) note, which includes a “most favored nation” clause. The SAFE component means Techstars’ equity percentage from the $200,000 SAFE will be determined by the company’s subsequent valuations. For instance, if a startup’s next round of financing values it at $10 million, Techstars would acquire 2% equity from the SAFE component, adding up to a total of 7% ownership.
These new terms align more closely with those offered by Y Combinator. The prominent Silicon Valley accelerator increased its investment in startups three years ago by introducing a $375,000 SAFE note on top of its standard $125,000 investment for 7% equity in the startup.
Determining which accelerator provides a more advantageous deal for startups depends significantly on the specific capital needs of the company. While Y Combinator offers more than double the funding provided by Techstars, this comes with a higher equity cost for the startups.
