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

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

For the most sought-after founders, the status of a top-tier accelerator is more and more weighed against giving up a big possession stake of their company.

 Ali Partovi, the veteran investor and CEO of enterprise agency Neo, desires to supply the mentorship and community of considered one of the most elite accelerator applications—without forcing the best up-and-coming tech leaders to hand over 7% or even 10% of their company before they’ve even began.

Partovi, who is understood for his early investments in Facebook, Cursor, and Kalshi, has just launched Neo Residency, a new, competitively structured program that combines the agency’s now four-year-old accelerator with a monitor for current school college students.

The terms that Neo Residency presents are so founder-friendly as to be “not even comparable to any other accelerator,” Partovi told TechCrunch.

For the cohort of 12 to 15 startups getting into the program this summer time, Neo will make investments $750,000 through an uncapped SAFE — a contract that offers an investor future fairness in alternate for cash now, with no ceiling on the valuation used to calculate that stake. Unlike the fixed-percentage offers typical of other accelerators, Neo gained’t obtain its fairness until the company’s next formal funding round, and even then, the dilution is tied to valuation. If a startup raises its next round at a $15 million valuation, Neo’s stake will likely be 5%, but when that valuation hits $100 million, the agency’s possession drops to just 0.75%.

“We take the risk up front, so this is extremely favorable to startups,” Partovi said.

In comparability, Y Combinator sometimes takes a set 7% of the company for $125,000, with another $375,000 invested on an uncapped MFN — or most-favored nation — SAFE, a clause that ensures early buyers get terms at the very least pretty much as good as those given to later ones. Meanwhile, Andreessen Horowitz’s Speedrun program sometimes invests $500,000 in alternate for 10% of the startup through a SAFE notice, and another $500,000 if the next round is raised within 18 months at no matter terms are agreed to by the other buyers.

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“We’re offering a deal so great that it’s appropriate even for founders who are not even considering any other accelerator,” Partovi said.

 The decrease fairness value is only a part of Neo Residency’s enchantment.

The founders will work for 3 months at Neo’s workplaces in San Francisco’s Jackson Square district, take part in a two-week bootcamp in the Oregon mountains, and be mentored by about 30 skilled operators, including Russell Kaplan, president of Cognition, and Fuzzy Khosrowshahi, CTO of Notion (and the creator of Google Sheets and also Partovi’s uncle).

But the program’s main draw is its status: Seed and Series A buyers typically have nice respect for founders handpicked by Partovi.

“The one [accelerator] I like right now that has very high signal, and every founder I met there is just wicked smart, is Neo,” Wesley Chan, co-founder and managing associate of FPV Ventures, said on stage at 2025 TechCrunch Disrupt.

Startups that have gone by way of the program embody Moment, a fintech company that has raised $56 million from buyers like Andreessen Horowitz, and Anterior, a healthcare AI startup backed by NEA and Sequoia.

The Neo Residency will also choose 5 to eight college students—both as people or small groups—who will obtain a $40,000, no-strings-attached grant to take a semester off to work on a project. While there isn’t any requirement to drop out or start a proper company instantly, Partovi said he hopes the college students will catch the entrepreneurial bug and, after they finally launch a startup, flip to Neo for funding.

Neo is conserving the program small and elite: it’s going to cap its two annual cohorts at 20 groups each, consisting of a mixture of energetic startups and pupil initiatives.

Why is Neo providing such beneficiant terms? “We have more confidence in our ability to attract and pick out future superstars than ever before,” Partovi said.

His monitor document suggests that confidence is well-founded. He famously met Cursor co-founder Michael Truell while Truell was still an MIT pupil and later wrote considered one of the first checks into the AI coding startup, now valued at practically $30 billion.

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