Ali Partovi’s Neo Looks to Upend the Accelerator Model with Low-Dilution Terms

Why It Matters

The low‑dilution structure could shift founder preferences toward Neo, pressuring traditional accelerators to rethink equity models and improving capital efficiency for early‑stage startups.

Key Takeaways

• Neo Residency offers $750k uncapped SAFE, dilution tied to valuation.
• Founder equity can drop to under 1% at high valuations.
• Program includes three‑month office stint, mountain bootcamp, elite mentors.
• Cohort limited to 12‑15 startups, plus 5‑8 student grants.
• Neo’s model challenges YC’s fixed‑percentage accelerator standard.

Pulse Analysis

The accelerator market has long been dominated by fixed‑percentage deals that trade early capital for a sizeable ownership slice, a model popularized by Y Combinator and Speedrun. As valuations climb and founders become more dilution‑aware, the trade‑off between mentorship and equity cost is increasingly scrutinized. Neo’s Residency program disrupts this equilibrium by offering a $750,000 uncapped SAFE that only converts at the next financing round, allowing the founder’s stake to shrink as the company’s valuation rises. This approach reframes the accelerator as a risk‑sharing partner rather than a traditional equity taker.

For investors, the uncapped SAFE shifts risk forward: Neo assumes the capital outlay before any valuation is set, betting on its ability to pick winners. If a portfolio company exits at a high multiple, Neo’s effective ownership could be well under one percent, delivering outsized returns on a modest capital base. Conversely, lower‑valued exits still provide meaningful upside because the SAFE converts at the actual round price. This variable‑dilution model forces competing accelerators to justify their fixed‑percentage take, potentially spurring a wave of more founder‑centric term structures.

The broader ecosystem stands to benefit from Neo’s hybrid focus on startups and student innovators. By granting $40,000 no‑strings‑attached scholarships, Neo cultivates early‑stage talent that may later feed into its residency pipeline, creating a continuous talent loop. However, the model’s success hinges on Partovi’s reputation and the program’s ability to deliver high‑quality networks and deal flow. If Neo consistently backs high‑growth companies, other accelerators may adopt similar low‑dilution terms, reshaping how early capital is priced and accelerating the overall efficiency of startup financing.

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

Marina Temkin · TechCrunch · Boston, MA · June 9, 2026

Ali Partovi, the veteran investor and CEO of venture firm Neo, wants to offer the mentorship and community of one of the most elite accelerator programs—without forcing the best up‑and‑coming tech leaders to hand over 7 % or even 10 % of their company before they’ve even started.

Partovi, who is known for his early investments in Facebook, Cursor, and Kalshi, has just introduced Neo Residency, a new, competitively structured program that combines the firm’s now four‑year‑old accelerator with a track for current college students.

The terms that Neo Residency offers 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 entering the program this summer, Neo will invest $750,000 via an uncapped SAFE — a contract that gives an investor future equity in exchange for money now, with no ceiling on the valuation used to calculate that stake. Unlike the fixed‑percentage deals typical of other accelerators, Neo won’t receive its equity 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 be 5 %, but if that valuation hits $100 million, the firm’s ownership drops to just 0.75 %.

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

In comparison, Y Combinator typically takes a fixed 7 % of the company for $125,000, with another $375,000 invested on an uncapped MFN (most‑favored‑nation) SAFE, a clause that ensures early investors get terms at least as good as those given to later ones. Meanwhile, Andreessen Horowitz’s Speedrun program typically invests $500,000 in exchange for 10 % of the startup via a SAFE note, and another $500,000 if the next round is raised within 18 months at whatever terms are agreed to by the other investors.

“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 lower equity cost 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 district, participate in a two‑week bootcamp in the Oregon mountains, and be mentored by about 30 experienced 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 prestige: Seed and Series A investors generally have great 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 partner of FPV Ventures, said on stage at 2025 TechCrunch Disrupt.

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

Neo Residency will also select five to eight students—either as individuals or small teams—who will receive a $40,000, no‑strings‑attached grant to take a semester off to work on a project. While there is no requirement to drop out or start a formal company immediately, Partovi said he hopes the students will catch the entrepreneurial bug and, when they eventually launch a startup, turn to Neo for funding.

Neo is keeping the program small and elite: it will cap its two annual cohorts at 20 teams each, consisting of a mix of active startups and student projects.

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

His track record suggests that confidence is well‑founded. He famously met Cursor co‑founder Michael Truell while Truell was still an MIT student and later wrote one of the first checks into the AI coding startup, now valued at nearly $30 billion.

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Marina Temkin is a venture capital and startups reporter at TechCrunch. Prior to joining TechCrunch, she wrote about VC for PitchBook and Venture Capital Journal. Earlier in her career, Marina was a financial analyst and earned a CFA charterholder designation.

You can contact or verify outreach from Marina by emailing [email protected] or via encrypted message at +1 347‑683‑3909 on Signal.