Techstars has announced a funding increase for startups joining its three-month accelerator program.

Starting with the fall 2025 cohort—which will begin between late August and early September—participating startups will receive US$220,000 in total funding, up from the previous US$120,000.

The new deal includes US$20,000 for 5% equity and an additional US$200,000 through an uncapped Simple Agreement for Future Equity (SAFE) note with a “most favored nation” clause.

This means the equity from the SAFE will depend on the startup’s future valuation.

🔗 Source: TechCrunch

🧠 Food for thought

1️⃣ Accelerators are evolving beyond equity to compete for top startups

Techstars’ funding increase reflects a fundamental shift in the accelerator business model that’s been developing over the last decade.

When Y Combinator launched in 2005, they offered just $20,000 for 6% equity, while Techstars initially invested $18,000 for 6% when it started in 2007 1.

The trend toward larger investments with uncapped notes began when YC increased its offering to $125,000 for 7% plus a $375,000 SAFE note in 2022, which Techstars is now directly responding to with its similar structure 2.

This evolution represents accelerators competing less on equity percentages and more on capital deployment, as research shows accelerator-backed startups are 3.4% more likely to raise venture funding and secure an average of $1.8 million more in their first year 3.

The shift toward uncapped notes allows accelerators to participate in future upside while appearing more founder-friendly during the initial investment stage, addressing concerns about early dilution that have deterred some founders.

2️⃣ Successful accelerators demonstrate dramatically different approaches to company building

Despite similar funding structures, YC and Techstars represent contrasting philosophies that have both produced billion-dollar outcomes.

Techstars emphasizes structured programming and intensive mentorship (their “GiveFirst” mentality), with daily workshops and classes focusing heavily on customer development in the early program stages 45.

In contrast, YC offers a more autonomous approach with less structured programming and greater emphasis on founder independence and peer learning 1.