After nearly two decades of backing early-stage founders, Techstars is updating its standard deal — and it’s a big one. Beginning with its Fall 2025 cohort, the accelerator will offer startups $220,000 in funding, a notable increase from the previous $120,000.
Here’s how the new deal works:
- $20,000 for 5% equity, which remains consistent with Techstars’ legacy model.
- $200,000 via an uncapped SAFE note with a “most favored nation” (MFN) clause. This means Techstars will convert its investment based on the best terms offered to future investors.
For example, if a startup later raises funds at a $10 million valuation, Techstars’ SAFE converts into 2% equity, making its total stake 7%.
According to Techstars Founder and CEO David Cohen in an investment update, the 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.”
He adds that “Demand for our accelerator programs has never been higher. Our applications have tripled since 2021 because the advantages of our accelerators are evident to founders. Through mentorship, capital, and lifetime access to our global network, Techstars enables the next generation of founders to succeed. The founders and startups we back will join Techstars alumni companies that have raised over $30 billion and are valued today at more than $120 billion. Those companies include 21 unicorns and 118 companies currently valued at over $100 million each”
With this new structure, Techstars moves closer to Y Combinator’s model, which includes $125,000 for 7% equity, plus a $375,000 SAFE.
Techstars in Africa
Techstars’ footprint in Africa—though brief—made a meaningful impact. In Nigeria, the launch of the ARM Labs Lagos Techstars Accelerator in 2022 was met with enthusiasm. Over two cohorts, 24 startups were selected and each received $120,000, along with mentorship and global visibility.
Some notable alumni include:
- Surge Africa: A logistics platform that connects businesses with reliable and affordable delivery services.
- PressOne Africa: A digital media platform offering engaging content and news across various categories.
- GetEquity: An investment platform democratizing access to startup funding for African investors.
Although Techstars wrapped up the program in Nigeria in 2024, the exposure and resources provided during its short stint helped position these startups for long-term success.
In Kenya, logistics and supply chain startup Duhqa benefited from participating in Techstars Toronto, later raising $2 million in seed funding.
Techstars vs YC: What’s the Better Deal for Startups?
Techstars’ new deal is a significant step toward matching YC’s appeal. While YC still offers more capital overall ($500K), Techstars now provides less upfront dilution and a flexible SAFE structure, which may be more founder-friendly depending on a startup’s capital strategy.
For African startups, the brief presence of Techstars in Nigeria served as a strong signal of global interest. Even though the local program concluded early, the connections, funding, and visibility gained continue to benefit the startups that went through it.
