Techstars
Techstars, a startup accelerator that has been operating for nearly two decades, has announced a new investment structure for participants in its three-month program. Starting with the fall 2025 batch, each accepted startup will receive $220,000 in funding, an increase of $100,000 from the previous offer.
This funding is divided into two parts. First, Techstars will invest $20,000 in exchange for 5% equity in the startup. Second, it will provide an additional $200,000 in the form of an uncapped SAFE note with a “most favored nation” clause. This means the equity received from the SAFE will depend on the startup’s valuation in its next funding round. For example, if the startup is valued at $10 million in its next round, Techstars will gain an additional 2% equity from the SAFE, bringing the total ownership to 7%.
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With this change, Techstars’ funding structure now closely resembles that of Y Combinator (YC), the Silicon Valley accelerator that three years ago increased its total funding to $500,000—consisting of $125,000 for 7% equity plus a $375,000 SAFE note.
The question is: which accelerator offers a better deal for startups? The answer depends on how much capital the startup needs. YC offers significantly more funding than Techstars, but startups must give up more equity in return.
