A note from Techstars Founder and CEO David Cohen

Today, Techstars is introducing an improved accelerator investment offer for companies accepted into our future accelerator programs. This improved offer of a $220,000* investment comes with all the benefits of our 3-month mentorship-driven accelerator program, valuable perks from our partners, and access to our world-class network of investors, partners, mentors, and alumni.

The $220,000 offer is made up of two components, including $200,000 through an uncapped MFN Safe and $20,000 through a Post-Money Convertible Equity Agreement (CEA). The total equity Techstars receives will be 5% of the company in common stock plus the future value of the $200,000 uncapped MFN Safe. For example, if your next round is valued at $20M pre-money, the $200,000 MFN Safe would then convert into 1% additional ownership at that time.

Our new offer gives founders more capital, better alignment, and a simpler and more easily comparable structure, enabling them to arrive at their next funding round with greater momentum. 

Demand for our accelerator programs has never been higher. Our applications have tripled since 2021 because the advantages of our accelerators are evident to founders. Through mentorship, capital, and lifetime access to our global network, Techstars enables the next generation of founders to succeed. The founders and startups we back will join Techstars alumni companies that have raised over $30 billion and are valued today at more than $120 billion. Those companies include 21 unicorns and 118 companies currently valued at over $100 million each.

In this video, Techstars Chief Investment Officer Andrew Cleland and I dig a little deeper into the key details of our new deal and its value to founders:

Applications for our Fall 2025 programs open today with the improved investment offer. If you’re interested in applying, you can see the full list of accelerators we operate worldwide here.

I can’t wait to see what you are building and to learn how we can partner to make the world a better place for everyone. 

David

The Details of Techstars’ Accelerator Investment Offer

Techstars invests $220,000* in companies accepted into its accelerator programs. This offer includes $200,000 through an uncapped MFN Safe, plus $20,000 through a Post-Money Convertible Equity Agreement (CEA). The total equity Techstars receives will be a minimum of 5%, plus whatever the uncapped MFN Safe converts into.

Before Techstars commits to investing in the company, certain checks will be required. But as soon as these checks are completed (background, incorporation, ownership, IP check, and company bank account), we’ll sign and wire the $20,000. 

There is no fee (i.e., monetary cost) to join a Techstars accelerator program.

The Investment Structure

Techstars’ total investment of $220,000 is made up of two convertible investment agreements and a side letter. One investment is a $20,000 fixed-percentage convertible equity agreement for 5% common stock (on a post-money basis). Another investment is a $200,000 uncapped MFN post-money Safe. The side letter sets out certain rights Techstars needs in the future.

• $20,000 fixed percentage convertible equity agreement (CEA) for 5% common stock. When the company does a priced round of at least $1 million, the CEA will convert into common stock equal to 5% of the company’s equity (including the existing option pool), after all Safes and other convertible instruments have been converted alongside the round.  The CEA and Safe are diluted by any new money in the priced round, as well as any option pool increases. 

• $200,000 uncapped MFN Safe. The Safe will also convert when the company does a priced round of at least $1 million. It is uncapped, meaning there is no pre-determined valuation cap or limit on the valuation at which it converts. Instead, the Safe will automatically adopt the terms of the lowest cap Safe (or other most favorable terms, such as a discount) issued between the specific MFN start date (around the start of the class) and the priced round. For example, if the company issues a subsequent Safe with a valuation cap or discount (like a 20% discount, or a $8,000,000 valuation cap), then Techstars gets the benefit of such terms. 

• The side letter establishes pro rata, digital assets, and drag-along rights, as well as various regulatory and tax matters. In short, Techstars and your company will have an ongoing shareholder relationship that lasts long after the program. Accordingly, the company needs to (i) give Techstars the ability to invest in new financings, like a seed round, (ii) regularly send Techstars information on its key operating metrics, burn, and more, and (iii) fulfill specific obligations at the time of certain events (such as a priced round or an exit). 

Why these terms? We believe in aligning our interests closely with our founders. Some investors only receive preferred stock, and nothing is wrong with that. But by structuring our offer so that the CEA in common equity, Techstars naturally sits on the same side of the table as portfolio company founders. Our return on investment happens when our portfolio companies have a successful outcome instead of receiving the return in priority over the founders and their employees. The uncapped MFN Safe is inherently founder-friendly and does not signal or pre-establish any valuation limit.

*The only exception is that Techstars accelerator programs in Asia-Pacific offer a $100,000 uncapped MFN Safe.

Incorporating

Techstars invests in US corporations or foreign equivalents (or holding companies). For those companies that haven’t incorporated yet, we know many stellar law firms that can help with the process.

If a company is incorporated in a non-approved country, it will need to complete a reorganization (sometimes called a flip) before Techstars can invest. For example, if a company is incorporated in India, it will need to complete a flip before Techstars can invest in it. Techstars has the network to help with this process, too.

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