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For the most sought-after founders, the prestige of a top-tier accelerator is increasingly weighed against giving up a significant ownership stake in their company.<\/p>\n
\u00a0Ali Partovi, the veteran investor and CEO of venture firm Neo<\/a>, wants to offer the mentorship and community of one of the most elite accelerator programs\u2014without forcing the best up-and-coming tech leaders to hand over 7%<\/a> or even 10%<\/a> of their company before they\u2019ve even started.<\/p>\n Partovi, who is known for his early investments in Facebook, Cursor, and Kalshi, has just introduced Neo Residency<\/a>, a new, competitively structured program that combines the firm\u2019s now four-year-old accelerator with a track for current college students.<\/p>\n The terms that Neo Residency offers are so founder-friendly as to be \u201cnot even comparable to any other accelerator,\u201d Partovi told TechCrunch.<\/p>\n For the cohort of 12 to 15 startups entering the program this summer, Neo will invest $750,000 via an uncapped SAFE \u2014 a contract that gives an investor future equity in exchange for money now, with no ceiling on the valuation used to calculate that stake. Unlike the fixed-percentage deals typical of other accelerators, Neo won\u2019t receive its equity until the company\u2019s next formal funding round, and even then, the dilution is tied to valuation. If a startup raises its next round at a $15 million valuation, Neo\u2019s stake will be 5%, but if that valuation hits $100 million, the firm\u2019s ownership drops to just 0.75%.<\/p>\n \u201cWe take the risk up front, so this is extremely favorable to startups,\u201d Partovi said.<\/p>\n In comparison, Y Combinator\u00a0typically takes a fixed 7%\u00a0<\/a>of the company for $125,000, with another $375,000 invested on an uncapped MFN \u2014 or most-favored nation \u2014 SAFE, a clause that ensures early investors get terms at least as good as those given to later ones. Meanwhile, Andreessen Horowitz\u2019s Speedrun program typically invests $500,000 in exchange for 10% of the startup via a SAFE note, and another $500,000 if the next round is raised within 18 months at whatever terms are agreed to by the other investors.<\/p>\n Techcrunch event<\/p>\n \n\t\t\t\t\t\t\t\t\tBoston, MA<\/span> \u201cWe\u2019re offering a deal so great that it\u2019s appropriate even for founders who are not even considering any other accelerator,\u201d Partovi said.<\/p>\n \u00a0The lower equity cost is only part of Neo Residency\u2019s appeal.<\/p>\n The founders will work for three months at Neo\u2019s offices in San Francisco\u2019s Jackson Square district, participate in a two-week bootcamp in the Oregon mountains, and be mentored by about 30 experienced operators, including Russell Kaplan, president of Cognition, and Fuzzy Khosrowshahi, CTO of Notion (and the creator of Google Sheets<\/a> and also Partovi\u2019s uncle).<\/p>\n But the program\u2019s main draw is its prestige: Seed and Series A investors generally have great respect for founders handpicked by Partovi.<\/p>\n \u201cThe one [accelerator] I like right now that has very high signal, and every founder I met there is just wicked smart, is Neo,\u201d Wesley Chan, co-founder and managing partner of FPV Ventures, said on stage at 2025 TechCrunch Disrupt<\/a>.<\/p>\n Startups that have gone through the program include Moment, a fintech company that has raised $56 million<\/a> from investors like Andreessen Horowitz, and Anterior, a healthcare AI startup backed by NEA and Sequoia.<\/p>\n The Neo Residency will also select five to eight students\u2014either as individuals or small teams\u2014who will receive a $40,000, no-strings-attached grant to take a semester off to work on a project. While there is no requirement to drop out or start a formal company immediately, Partovi said he hopes the students will catch the entrepreneurial bug and, when they eventually launch a startup, turn to Neo for funding.<\/p>\n Neo is keeping the program small and elite: it will cap its two annual cohorts at 20 teams each, consisting of a mix of active startups and student projects.<\/p>\n Why is Neo offering such generous terms? \u201cWe have more confidence in our ability to attract and pick out future superstars than ever before,\u201d Partovi said.<\/p>\n His track record suggests that confidence is well-founded. He famously met Cursor co-founder Michael Truell while Truell was still an MIT student and later wrote one of the first checks into the AI coding startup, now valued at nearly $30 billion<\/a>.<\/p>\n<\/div>\n
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