Summary:
Techstars raises its startup funding to $220,000, up by $100,000 from before.
Investment structure includes $20,000 for 5% equity and $200,000 as an uncapped SAFE note.
New terms are similar to Y Combinator, which offers more funding but requires more equity.
Decision on which accelerator is better depends on capital needs of the startup.
Techstars Announces Increased Funding for Startups
Techstars, a nearly 20-year-old startup accelerator, has unveiled new investment terms for startups participating in its three-month program. Starting with the fall 2025 batch, Techstars will now invest $220,000, which is $100,000 more than previous offers.
Investment Breakdown
The funding will be split into two parts:
- $20,000 in exchange for 5% equity in the startup.
- $200,000 provided as an uncapped SAFE note with a âmost favored nationâ clause. This means Techstarsâ ownership percentage from the SAFE will be influenced by the startup's future valuations. For instance, if a startup's next financing values it at $10 million, Techstars will hold 2% equity from the SAFE, totaling 7% ownership.
Comparison with Y Combinator
These new terms closely mirror those of Y Combinator (YC), which increased its funding three years ago to include a $375,000 SAFE note alongside its standard $125,000 for 7% equity.
So, which accelerator offers a better deal? It largely depends on the startup's capital requirements. YC provides over double the funding but requires a greater equity stake compared to Techstars.
Marina Temkin is a venture capital and startups reporter at TechCrunch, previously writing for PitchBook and Venture Capital Journal. She has a background in finance and holds a CFA charterholder designation.
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