Ali Partovi’s Neo looks to upend the accelerator model with low-dilution terms

For the astir sought-after founders, the prestige of a top-tier accelerator is progressively weighed against giving up a important ownership involvement successful their company.

 Ali Partovi, the seasoned capitalist and CEO of venture steadfast Neo, wants to connection the mentorship and assemblage of 1 of the astir elite accelerator programs—without forcing the champion up-and-coming tech leaders to manus implicit 7% oregon adjacent 10% of their institution earlier they’ve adjacent started.

Partovi, who is known for his aboriginal investments successful Facebook, Cursor, and Kalshi, has conscionable introduced Neo Residency, a new, competitively structured programme that combines the firm’s present four-year-old accelerator with a way for existent assemblage students.

The presumption that Neo Residency offers are truthful founder-friendly arsenic to beryllium “not adjacent comparable to immoderate different accelerator,” Partovi told TechCrunch.

For the cohort of 12 to 15 startups entering the programme this summer, Neo volition put $750,000 via an uncapped SAFE — a declaration that gives an capitalist aboriginal equity successful speech for wealth now, with nary ceiling connected the valuation utilized to cipher that stake. Unlike the fixed-percentage deals emblematic of different accelerators, Neo won’t person its equity until the company’s adjacent ceremonial backing round, and adjacent then, the dilution is tied to valuation. If a startup raises its adjacent circular astatine a $15 cardinal valuation, Neo’s involvement volition beryllium 5%, but if that valuation hits $100 million, the firm’s ownership drops to conscionable 0.75%.

“We instrumentality the hazard up front, truthful this is highly favorable to startups,” Partovi said.

In comparison, Y Combinator typically takes a fixed 7% of the institution for $125,000, with different $375,000 invested connected an uncapped MFN — oregon most-favored federation — SAFE, a clause that ensures aboriginal investors get presumption astatine slightest arsenic bully arsenic those fixed to aboriginal ones. Meanwhile, Andreessen Horowitz’s Speedrun programme typically invests $500,000 successful speech for 10% of the startup’ via a SAFE note, and different $500,000 if the adjacent circular is raised wrong 18 months astatine immoderate presumption are agreed to by the different investors.

“We’re offering a woody truthful large that it’s due adjacent for founders who are not adjacent considering immoderate different accelerator,” Partovi said.

 The little equity outgo is lone portion of Neo Residency’s appeal.

The founders volition enactment for 3 months astatine Neo’s offices successful San Francisco’s Jackson Square district, enactment successful a two-week bootcamp successful the Oregon mountains, and beryllium mentored by astir 30 experienced operators, including Russell Kaplan, president of Cognition, and Fuzzy Khosrowshahi, CTO of Notion (and the creator of Google Sheets and besides Partovi’s uncle).

But the program’s main gully is its prestige: Seed and Series A investors mostly person large respect for founders handpicked by Partovi.

“The 1 [accelerator] I similar close present that has precise precocious signal, and each laminitis I met determination is conscionable wicked smart, is Neo,” Wesley Chan, co-founder and managing spouse of FPV Ventures, said connected signifier astatine 2025 TechCrunch Disrupt.

Startups that person gone done the programme see Moment, a fintech institution that has raised $56 million from investors similar Andreessen Horowitz, and Anterior, a healthcare AI startup backed by NEA and Sequoia.

The Neo Residency volition besides prime 5 to 8 students—either arsenic individuals oregon tiny teams—who volition person a $40,000, no-strings-attached assistance to instrumentality a semester disconnected to enactment connected a project. While determination is nary request to driblet retired oregon commencement a ceremonial institution immediately, Partovi said helium hopes the students volition drawback the entrepreneurial bug and, erstwhile they yet motorboat a startup, crook to Neo for funding.

Neo is keeping the programme tiny and elite: it volition headdress its 2 yearly cohorts astatine 20 teams each, consisting of a premix of progressive startups and pupil projects.

Why is Neo offering specified generous terms? “We person much assurance successful our quality to pull and prime retired aboriginal superstars than ever before,” Partovi said.

His way grounds suggests that assurance is well-founded. He famously met Cursor co-founder Michael Truell portion Truell was inactive an MIT pupil and aboriginal wrote 1 of the archetypal checks into the AI coding startup, present valued astatine astir $30 billion.