In a move to stay competitive with rival accelerators, Techstars has increased its standard funding offer to $220,000, adopting a structure similar to that of Y Combinator (YC). The change, announced on April 18, 2025, reflects growing pressure on startup accelerators to offer more capital in exchange for equity, especially as early-stage startups face tighter funding environments.
According to Techstars CEO Maëlle Gavet, the new investment structure includes a $120,000 convertible note in addition to the existing $100,000 for 6% common equity. The convertible note is designed to give startups flexibility while providing Techstars with additional upside if the companies succeed. The model essentially mirrors YC’s deal, which includes $125,000 for 7% equity, plus a $375,000 uncapped SAFE with a most-favored-nation clause.
Techstars has run nearly 100 accelerator programs globally and backed over 3,700 startups to date. The latest change is a strategic play to attract top-tier founders and remain relevant in a crowded and evolving accelerator market. Gavet emphasized that the convertible note will be “founder-friendly” and aimed at helping startups bridge the increasingly long gap between demo day and seed funding rounds.
The new model applies across Techstars’ global accelerator programs, including those in fintech, healthcare, and climate tech verticals. It also reflects broader trends in the startup ecosystem, where valuations are down, but investor expectations are rising.
Some observers see this as a necessary evolution. “It’s a smart move. Startups today need more than just mentorship—they need meaningful capital to reach product-market fit,” said one VC familiar with the matter. “Techstars aligning more closely with YC’s structure levels the playing field.”
Critics, however, caution that increasing capital without also improving follow-on support and network access may not yield better outcomes. Others argue that the convertible note might complicate cap tables down the line, especially for inexperienced founders.
Still, Techstars’ reputation for hands-on mentorship, global reach, and vertical-specific programs could give it a distinct edge even with similar funding structures. The organization has also hinted at deeper partnerships with VCs and corporate sponsors to help startups secure follow-on rounds more efficiently.
This change also comes as startups face longer fundraising cycles, lower valuations, and increased scrutiny from investors. The additional capital could make Techstars a more appealing launchpad for ambitious founders navigating the current market.
