{"id":3094816,"date":"2026-02-19T22:13:55","date_gmt":"2026-02-20T06:13:55","guid":{"rendered":"https:\/\/techcrunch.com\/?p=3094816"},"modified":"2026-02-20T09:43:48","modified_gmt":"2026-02-20T17:43:48","slug":"ali-partovis-neo-looks-to-upend-the-accelerator-model-with-low-dilution-terms","status":"publish","type":"post","link":"https:\/\/techcrunch.com\/2026\/02\/19\/ali-partovis-neo-looks-to-upend-the-accelerator-model-with-low-dilution-terms\/","title":{"rendered":"Ali Partovi&#8217;s Neo looks to upend the accelerator model with low-dilution terms"},"content":{"rendered":"\n<p id=\"speakable-summary\" class=\"wp-block-paragraph\">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\n<p class=\"wp-block-paragraph\">\u00a0Ali Partovi, the veteran investor and CEO of <a href=\"https:\/\/techcrunch.com\/2025\/04\/27\/from-coding-tests-to-billion-dollar-startups-ali-partovis-eight-year-experiment-is-paying-off\/\" target=\"_blank\" rel=\"noreferrer noopener\">venture firm Neo<\/a>, wants to offer the mentorship and community of one of the most elite accelerator programs \u2014 without forcing the best up-and-coming tech leaders to hand over <a href=\"https:\/\/techcrunch.com\/2023\/09\/06\/ycombinator-demo-day-investors\/\" target=\"_blank\" rel=\"noreferrer noopener\">7%<\/a> or sometimes <a href=\"https:\/\/techcrunch.com\/2026\/02\/15\/how-to-get-into-a16zs-super-competitive-speedrun-startup-accelerator-program\/\" target=\"_blank\" rel=\"noreferrer noopener\">10%<\/a> of their company before they\u2019ve even started.<\/p>\n\n<p class=\"wp-block-paragraph\">Partovi, who is known for his early investments in Facebook, Cursor, and Kalshi, has just introduced <a href=\"https:\/\/neo.substack.com\/p\/83a288ef-48c4-420f-a799-6ca85f85db03?postPreview=paid&amp;updated=2026-02-18T16%3A19%3A56.159Z&amp;audience=everyone&amp;free_preview=false&amp;freemail=true\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">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\n<p class=\"wp-block-paragraph\">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\n<p class=\"wp-block-paragraph\">For the cohort of 12 to 15 startups entering the program this summer, Neo will invest $750,000 via an uncapped SAFE &#8212; 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&#8217;t 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\n<p class=\"wp-block-paragraph\">\u201cWe take the risk up front, so this is extremely favorable to startups,\u201d Partovi said.<\/p>\n\n<p class=\"wp-block-paragraph\">In comparison, Y Combinator\u00a0<a href=\"https:\/\/www.ycombinator.com\/deal\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">typically takes a fixed 7%<\/a>\u00a0of the company for $125,000, with another $375,000 invested on an uncapped MFN &#8212; or most-favored nation &#8212; 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<div class=\"wp-block-techcrunch-inline-cta\">\n\t<div class=\"inline-cta__wrapper\">\n\t\t<div class=\"inline-cta__logo\">\n\t\t\t<svg aria-hidden=\"true\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"41\" height=\"20\" fill=\"none\" viewBox=\"0 0 41 20\"><path fill=\"#fff\" d=\"M0 0v6.452h7.097V20h7.097V6.452h6.451V0zM27.742 13.548V6.452h-7.097V20h20v-6.452zM40.645 0H27.742v6.452h12.903z\"\/><\/svg>\t\t<\/div>\n\t\t<div class=\"inline-cta__flag\">Techcrunch event<\/div>\n\t\t<div class=\"inline-cta__content\">\n\t\t\t<div class=\"inline-cta__header-container\">\n\t\t\t\t<div class=\"inline-cta__header-container-desktop\">\n\t\t\t\t\t\t\t\t\t\t\t<h3 class=\"inline-cta__header has-h-5-font-size\">Save up to $300 or 30% to TechCrunch Founder Summit<\/h3>\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<h4 class=\"inline-cta__subheader\">1,000+<strong> founders<\/strong> and investors come together at <strong>TechCrunch Founder Summit 2026<\/strong> for a full day focused on growth, execution, and real-world scaling. Learn from founders and investors who have shaped the industry. Connect with peers navigating similar growth stages. Walk away with tactics you can apply immediately.<br><br>Offer ends March 13.<\/h4>\n\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<div class=\"inline-cta__header-container-mobile\">\n\t\t\t\t\t\t\t\t\t\t\t<h3 class=\"inline-cta__header has-h-5-font-size\">Save up to $300 or 30% to TechCrunch Founder Summit<\/h3>\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<h4 class=\"inline-cta__subheader\">1,000+<strong> founders<\/strong> and investors come together at <strong>TechCrunch Founder Summit 2026<\/strong> for a full day focused on growth, execution, and real-world scaling. Learn from founders and investors who have shaped the industry. Connect with peers navigating similar growth stages. Walk away with tactics you can apply immediately<br><br>Offer ends March 13.<\/h4>\n\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t<\/div>\n\t\t\t<div class=\"inline-cta__event-info\">\n\t\t\t\t\t\t\t\t\t<span class=\"inline-cta__location\">Boston, MA<\/span>\n\t\t\t\t\t\t\t\t\t\t\t\t\t<span class=\"inline-cta__separator\">|<\/span>\n\t\t\t\t\t\t\t\t\t\t\t\t\t<span class=\"inline-cta__date\">June 9, 2026<\/span>\n\t\t\t\t\t\t\t<\/div>\n\t\t\t<div class=\"inline-cta__register-button\">\n\t\t\t\t\n\n<div class=\"wp-block-buttons is-layout-flex wp-block-buttons-is-layout-flex\">\n<div class=\"wp-block-button\"><a data-ctaText=\"REGISTER NOW\" data-destinationLink=\"https:\/\/techcrunch.com\/events\/techcrunch-founder-summit-2026\/?utm_source=tc&amp;utm_medium=ad&amp;utm_campaign=tcfoundersummit2026&amp;utm_content=seb&amp;promo=tc_inline_seb&amp;display=\" data-event=\"button\" class=\"wp-block-button__link wp-element-button\" href=\"https:\/\/techcrunch.com\/events\/techcrunch-founder-summit-2026\/?utm_source=tc&amp;utm_medium=ad&amp;utm_campaign=tcfoundersummit2026&amp;utm_content=seb&amp;promo=tc_inline_seb&amp;display=\" target=\"_blank\" rel=\"noreferrer noopener\">REGISTER NOW<\/a><\/div>\n<\/div>\n\n\t\t\t<\/div>\n\t\t<\/div>\n\t<\/div>\n<\/div>\n\n<p class=\"wp-block-paragraph\">\u201cWe&#8217;re offering a deal so great that it&#8217;s appropriate even for founders who are not even considering any other accelerator,\u201d Partovi said.<\/p>\n\n<p class=\"wp-block-paragraph\">&nbsp;The lower equity cost is only part of Neo Residency\u2019s appeal.<\/p>\n\n<p class=\"wp-block-paragraph\">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 <a href=\"https:\/\/bubble.io\/blog\/the-new-build-02-fuzzy-khosrowshahi\/\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">Google Sheets<\/a> and also Partovi&#8217;s uncle).<\/p>\n\n<p class=\"wp-block-paragraph\">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\n<p class=\"wp-block-paragraph\">\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, <a href=\"https:\/\/www.youtube.com\/watch?v=ILQ6WkufBs8&amp;t=1732s\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">said onstage at 2025 TechCrunch Disrupt<\/a>.<\/p>\n\n<p class=\"wp-block-paragraph\">Startups that have gone through the program include Moment, a fintech company that has raised <a href=\"https:\/\/www.bloomberg.com\/news\/articles\/2025-11-13\/ai-startup-cursor-raises-funds-at-29-3-billion-value-wsj-says\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">$56 million<\/a> from investors like Andreessen Horowitz, and Anterior, a healthcare AI startup backed by NEA and Sequoia.<\/p>\n\n<p class=\"wp-block-paragraph\">The Neo Residency will also select five to eight students \u2014 either as individuals or small teams \u2014 who 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\n<p class=\"wp-block-paragraph\">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\n<p class=\"wp-block-paragraph\">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\n<p class=\"wp-block-paragraph\">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 <a href=\"https:\/\/techcrunch.com\/2025\/11\/13\/coding-assistant-cursor-raises-2-3b-5-months-after-its-previous-round\/\" target=\"_blank\" rel=\"noreferrer noopener\">$30 billion<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Neo&#8217;s new Residency program invests $750,000 in an uncapped SAFE for startups and provides a $40,000 no-strings-attached grant for college students.<\/p>\n","protected":false},"author":133574636,"featured_media":3094818,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"tc-featured-article":false,"tc-header-option":"","tc-breaking-news":false,"tc-article-brief":false,"carmot_uuid":"","apple_news_api_created_at":"2026-02-20T06:14:01Z","apple_news_api_id":"8f69cd6e-187b-490e-95d3-302651a6065b","apple_news_api_modified_at":"2026-02-20T17:43:47Z","apple_news_api_revision":"AAAAAAAAAAAAAAAAAAAAAQ==","apple_news_api_share_url":"https:\/\/apple.news\/Aj2nNbhh7SQ6V0zAmUaYGWw","apple_news_coverimage":0,"apple_news_coverimage_caption":"","apple_news_is_hidden":false,"apple_news_is_paid":false,"apple_news_is_preview":false,"apple_news_is_sponsored":false,"apple_news_maturity_rating":"","apple_news_metadata":"\"\"","apple_news_pullquote":"","apple_news_pullquote_position":"","apple_news_slug":"","apple_news_sections":[],"apple_news_suppress_video_url":false,"apple_news_use_image_component":false,"tc_subtitle":"","tc_featured_image_disabled":false,"tc_exclude_from_rss_feed":false,"tc_exclude_from_content_rivers":false,"footnotes":""},"categories":[20429,577030455],"tags":[2081002,2864051,22376,10241],"tc_region":[],"tc_event":[],"tc_storyline_tax":[],"coauthors":[577238400],"class_list":["post-3094816","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-startups","category-venture","tag-accelerators","tag-ali-partovi","tag-exclusive","tag-neo"],"apple_news_notices":[],"yoast_head":"<!-- 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