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, needs to supply the mentorship and neighborhood of one of the elite accelerator applications—with out forcing the very best up-and-coming tech leaders handy over 7% and even 10% of their firm earlier than they’ve even began.
Partovi, who is understood 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 school college students.
The phrases that Neo Residency gives are so founder-friendly as to be “not even corresponding to another accelerator,” Partovi instructed TechCrunch.
For the cohort of 12 to fifteen startups coming into this system this summer season, Neo will make investments $750,000 through an uncapped SAFE — a contract that offers an investor future fairness in trade for cash now, with no ceiling on the valuation used to calculate that stake. In contrast to the fixed-percentage offers typical of different accelerators, Neo gained’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 will likely 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 stated.
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 buyers get phrases at the least nearly as good as these given to later ones. In the meantime, Andreessen Horowitz’s Speedrun program sometimes invests $500,000 in trade for 10% of the startup’ through a SAFE observe, and one other $500,000 if the subsequent spherical is raised inside 18 months at no matter phrases are agreed to by the opposite buyers.
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“We’re providing a deal so nice that it’s acceptable even for founders who should not even contemplating another accelerator,” Partovi stated.
The decrease fairness value is just 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 most important draw is its status: Seed and Sequence A buyers 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 accomplice of FPV Ventures, said on stage at 2025 TechCrunch Disrupt.
Startups which have gone via this system embrace Second, a fintech firm that has raised $56 million from buyers like Andreessen Horowitz, and Anterior, a healthcare AI startup backed by NEA and Sequoia.
The Neo Residency may also 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 undertaking. Whereas there isn’t any requirement to drop out or begin a proper firm instantly, Partovi stated he hopes the scholars will catch the entrepreneurial bug and, after they ultimately launch a startup, flip to Neo for funding.
Neo is holding this system small and elite: it can cap its two annual cohorts at 20 groups every, consisting of a mixture of energetic startups and pupil tasks.
Why is Neo providing such beneficiant phrases? “We’ve extra confidence in our potential to draw and pick future superstars than ever earlier than,” Partovi stated.
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 almost $30 billion.
