For the most sought-after founders, the prestige of a top-tier accelerator and giving up significant ownership of their company weighs more and more.
Ali Partovi, veteran investor and CEO of venture firm Neo, wants to provide mentorship and community for one of the most elite accelerator programs. In doing so, we don't force our best up-and-coming technology leaders to give up 7% or even 10% of the company before they start.
Partovi, known for his early investments in Facebook, Cursor, and Kalshi, just introduced Neo Residency, a new competitively structured program that combines the company's four-year-old accelerator with courses for current college students.
The conditions offered by Neo Residency are so founder-friendly that they are “unmatched by other accelerators,” Partovi told TechCrunch.
Neo plans to invest $750,000 through an uncapped SAFE into 12 to 15 startups participating in the program this summer. A SAFE is a contract that gives investors future stock in exchange for money now, and there is no cap on the valuation used to calculate the amount invested. Unlike the fixed-ratio deals typical of other accelerators, Neo won't receive any equity until the company's next formal funding round, and even then the dilution is tied to its valuation. If the startup raises its next round at a $15 million valuation, Neo's stake will be 5%, but once that valuation reaches $100 million, its ownership in the company will drop to just 0.75%.
“This is very advantageous for startups because we are assuming the risk up front,” Partovi said.
By comparison, Y Combinator typically acquires a fixed 7% stake in a company for $125,000 and invests an additional $375,000 in uncapped most-favored-nation status. A SAFE is a clause that ensures that early investors receive terms at least as good as those given to later investors. Meanwhile, Andreessen Horowitz's speedrun program typically invests $500,000 in exchange for 10% of the startup through a SAFE note, with an additional $500,000 if the next round is raised within 18 months on terms agreed to by other investors.
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“We offer such great deals that it's a good fit for founders who might not even be considering other accelerators,” Partovi said.
Low cost of capital is only part of Neo Residency's appeal.
The founders will work for three months at Neo's offices in San Francisco's Jackson Square neighborhood, then attend a two-week bootcamp in the Oregon Mountains, where they will be mentored by about 30 experienced operators, including Cognition President Russell Kaplan and Notion CTO Fuzzy Khosrowshahi (the creator of Google Sheets and Partovi's uncle).
However, the main attraction of this program is its prestige. Seed investors and Series A investors generally have great respect for Partvi's hand-picked founders.
“That person is [accelerator] I like that the signal is very high right now, and all the founders I met there were very smart people, which is Neo,” Wesley Chan, co-founder and managing partner of FPV Ventures, said on stage at the 2025 TechCrunch Disrupt.
Startups using the program include Moment, a fintech company that has raised $56 million from investors including Andreessen Horowitz, and Anteria, a healthcare AI startup backed by NEA and Sequoia.
Neo Residencies also select five to eight students, either individually or in small teams, to receive an unconditional grant of $40,000 to take a semester off to work on a project. While there's no need to drop out or start a formal company right away, Partovi said he wants students to get the entrepreneurship bug and turn to Neo for funding when they ultimately launch a startup.
Neo keeps the program small and elite, with two annual cohorts limited to 20 teams each, consisting of a mix of active startups and student projects.
Why is Neo offering such generous terms? “We are more confident than ever in our ability to attract and select future superstars,” Partovi said.
His track record shows that his confidence is well-founded. He famously met Cursor co-founder Michael Truell while he was still a student at MIT, and went on to write one of the first checks for the AI coding startup, which is now valued at nearly $30 billion.