For probably the most sought-after founders, the status of a top-tier accelerator is more and more weighed in opposition to giving up a big possession stake of their firm.
Ali Partovi, the veteran investor and CEO of enterprise agency Neo, desires to supply the mentorship and group of one of the crucial elite accelerator applications—with out forcing one of the best up-and-coming tech leaders at hand over 7% and even 10% of their firm earlier than they’ve even began.
Partovi, who is thought for his early investments in Fb, Cursor, and Kalshi, has simply launched Neo Residency, a brand new, competitively structured program that mixes the agency’s now four-year-old accelerator with a monitor for present faculty college students.
The phrases that Neo Residency presents are so founder-friendly as to be “not even corresponding to some other accelerator,” Partovi informed TechCrunch.
For the cohort of 12 to fifteen startups coming into this system this summer season, Neo will make investments $750,000 by way of an uncapped SAFE — a contract that offers an investor future fairness in change for cash now, with no ceiling on the valuation used to calculate that stake. Not like the fixed-percentage offers typical of different accelerators, Neo received’t obtain its fairness till the corporate’s subsequent formal funding spherical, and even then, the dilution is tied to valuation. If a startup raises its subsequent spherical at a $15 million valuation, Neo’s stake might be 5%, but when that valuation hits $100 million, the agency’s possession drops to only 0.75%.
“We take the danger up entrance, so that is extraordinarily favorable to startups,” Partovi mentioned.
As compared, Y Combinator typically takes a fixed 7% of the corporate for $125,000, with one other $375,000 invested on an uncapped MFN — or most-favored nation — SAFE, a clause that ensures early traders get phrases a minimum of pretty much as good as these given to later ones. In the meantime, Andreessen Horowitz’s Speedrun program sometimes invests $500,000 in change for 10% of the startup’ by way of a SAFE word, and one other $500,000 if the subsequent spherical is raised inside 18 months at no matter phrases are agreed to by the opposite traders.
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“We’re providing a deal so nice that it’s acceptable even for founders who aren’t even contemplating some other accelerator,” Partovi mentioned.
The decrease fairness value is simply a part of Neo Residency’s attraction.
The founders will work for 3 months at Neo’s workplaces in San Francisco’s Jackson Sq. district, take part in a two-week bootcamp within the Oregon mountains, and be mentored by about 30 skilled operators, together with Russell Kaplan, president of Cognition, and Fuzzy Khosrowshahi, CTO of Notion (and the creator of Google Sheets and likewise Partovi’s uncle).
However this system’s primary draw is its status: Seed and Sequence A traders typically have nice respect for founders handpicked by Partovi.
“The one [accelerator] I like proper now that has very excessive sign, and each founder I met there may be simply depraved sensible, is Neo,” Wesley Chan, co-founder and managing associate of FPV Ventures, said on stage at 2025 TechCrunch Disrupt.
Startups which have gone by this system embrace Second, a fintech firm that has raised $56 million from traders like Andreessen Horowitz, and Anterior, a healthcare AI startup backed by NEA and Sequoia.
The Neo Residency may even choose 5 to eight college students—both as people or small groups—who will obtain a $40,000, no-strings-attached grant to take a semester off to work on a challenge. Whereas there isn’t any requirement to drop out or begin a proper firm instantly, Partovi mentioned he hopes the scholars will catch the entrepreneurial bug and, once they ultimately launch a startup, flip to Neo for funding.
Neo is conserving this system small and elite: it’s going to cap its two annual cohorts at 20 groups every, consisting of a mixture of energetic startups and pupil initiatives.
Why is Neo providing such beneficiant phrases? “We have now extra confidence in our means to draw and pick future superstars than ever earlier than,” Partovi mentioned.
His monitor document means that confidence is well-founded. He famously met Cursor co-founder Michael Truell whereas Truell was nonetheless an MIT pupil and later wrote one of many first checks into the AI coding startup, now valued at practically $30 billion.
