Techstars Boosts Startup Funding to $220K, Echoes Y Combinator’s Model
Techstars is revamping its accelerator funding model, raising the total capital it invests in each startup to $220,000 starting with its fall 2025 cohort. The move brings the 20-year-old accelerator closer to Y Combinator’s funding structure, increasing its competitiveness in the startup support ecosystem.
The new structure includes two components:
- $20,000 for 5% equity in the startup.
- $200,000 via an uncapped SAFE note with a most favored nation (MFN) clause. This means Techstars’ equity stake for the SAFE will depend on the valuation at the company’s next funding round. For instance, if the startup is later valued at $10 million, Techstars would hold an additional 2%, totaling 7% ownership.
The updated terms align closely with Y Combinator, which offers $500,000 — $125,000 for 7% equity and an additional $375,000 through a SAFE note. While YC gives more capital upfront, Techstars may appeal to founders seeking more flexible equity dilution terms.
The better deal between the two depends on a startup’s capital needs and growth stage. Techstars now provides a more founder-friendly alternative for early-stage companies looking for substantial backing without steep equity sacrifices.
As competition heats up among global accelerators, Techstars’ funding boost signals a deeper commitment to nurturing high-potential startups while giving them more room to scale smartly.
