Techstars is introducing an improved accelerator investment offer for companies accepted into its future accelerator programs to $220,000 with all the benefits of its 3-month mentorship-driven accelerator program.
The $220,000 offer is made up of two components, including $200,000 through an uncapped MFN Safe and $20,000 through a Post-Money Convertible Equity Agreement (CEA). The total equity Techstars receives will be 5% of the company in common stock plus the future value of the $200,000 uncapped MFN Safe.
According to Techstars Founder and CEO David Cohen, “Our new offer gives founders more capital, better alignment, and a simpler and more easily comparable structure, enabling them to arrive at their next funding round with greater momentum.”
Cohen added that demand for Techstars accelerator programs has soared with applications tripling since 2021. Through mentorship, capital, and lifetime access to its global network, Techstars enables the next generation of founders to succeed.
Techstars alumni companies have raised over $30 billion and are valued today at more than $120 billion and include 21 unicorns and 118 companies currently valued at over $100 million each.
In 2022, Techstars expanded to key cities in Africa in a move to discover excellent founders and startups with great potential out of Africa. Before the update to match Y Combinator’s $220,000 deal, Techstars invested $20,000 in exchange for 6% common equity, and an optional $100,000 convertible note to bring the total potential funding to $120,000—far less than Y Combinator’s famed $220,000, which includes a $125K standard investment plus a $375K SAFE note on uncapped future rounds.
However, with these new update, things are changing as applications for Techstars Fall 2025 programs at accelerators worldwide here will receive $220,000 from Techstars. This offer includes $200,000 through an uncapped MFN Safe, plus $20,000 through a Post-Money Convertible Equity Agreement (CEA). The total equity Techstars receives will be a minimum of 5%, plus whatever the uncapped MFN Safe converts into.
Techstars’ total investment of $220,000 is made up of two convertible investment agreements and a side letter. One investment is a $20,000 fixed-percentage convertible equity agreement for 5% common stock (on a post-money basis). Another investment is a $200,000 uncapped MFN post-money Safe. The side letter sets out certain rights Techstars needs in the future.
The $20,000 fixed percentage convertible equity agreement (CEA) for 5% common stock. When the company does a priced round of at least $1 million, the CEA will convert into common stock equal to 5% of the company’s equity (including the existing option pool), after all Safes and other convertible instruments have been converted alongside the round. The CEA and Safe are diluted by any new money in the priced round, as well as any option pool increases.
$200,000 uncapped MFN Safe will also convert when the company does a priced round of at least $1 million. It is uncapped, meaning there is no pre-determined valuation cap or limit on the valuation at which it converts. Instead, the Safe will automatically adopt the terms of the lowest cap Safe (or other most favorable terms, such as a discount) issued between the specific MFN start date (around the start of the class) and the priced round. For example, if the company issues a subsequent Safe with a valuation cap or discount (like a 20% discount, or a $8,000,000 valuation cap), then Techstars gets the benefit of such terms.
The only exception is that Techstars accelerator programs in Asia-Pacific offer a $100,000 uncapped MFN Safe.
