Techstars, a startup accelerator for nearly 20 years, has announced new terms for startups participating in the three-month program. The organization is currently investing $220,000. This is a company that starts with the fall 2025 batch and is $100,000 more than before.
Capital is divided into two components. The group offers businesses $20,000 in exchange for 5% ownership of the business. Startups also receive $200,000 in the form of endless, secure memos with the “most preferred country” clause. More simply, TechStars' $200,000 SAFE ownership rate depends on our subsequent valuation. For example, if the “price” is $10 million for the startup's next funding, TechStars will receive a 2% stake in the secure component with a total of 7% ownership.
TechStars' new terms closely reflect the new terms of Y Combinator. The famous Silicon Valley Accelerator increased its funding for startups three years ago by adding a $375,000 safe memo to a 7% standard contract for startups three years ago.
So which accelerators offer better deals for startups? The answer depends heavily on the company's capital needs. Compared to TechStars, startups passing through YC earn more than twice their funds, but they abandon more equity.