Ali Partovi’s Neo looks to flip the acceleration model with low dilution terms

For the most sought-after founders, the prestige of a top-tier accelerator is increasingly weighed against giving up a significant ownership stake in their company.

Ali Partovi, veteran investor and CEO of Neo, wants to provide mentorship and community to one of the best accelerator programs — without forcing the best up-and-coming tech leaders to hand over 7% or even 10% of their company before they even get started.

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

Partovi told TechCrunch that the terms offered by Neo Residency are so founder-friendly that they “cannot be compared to any other accelerator.”

For the group of 12 to 15 startups entering the program this summer, Neo will invest $750,000 via an open-ended SAFE — a contract that gives the investor future shares in exchange for money now, with no cap on the valuation used to calculate that stake. Unlike fixed-percentage deals typical of other accelerators, Neo won’t get its shares until the company’s next formal funding round, and even then, dilution is tied to valuation. If the startup raises its next round at a valuation of $15 million, Neo’s stake will be 5%, but if that valuation reaches $100 million, the company’s ownership drops to just 0.75%.

“We take risks upfront, so this is very beneficial for startups,” Partovi said.

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

“We are offering a deal that is so great that it is suitable even for founders who would not even consider any other accelerator,” Partovi said.

The low cost of shares is only part of the appeal of Neo Residency.

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 workers, including Russell Kaplan, president of Cognition, and Fuzzy Khosrowshahi, CTO at Notion (and the creator of Google Sheets and also Partovi’s uncle).

But the program’s main attraction is its prestige: seed and Series A investors generally have high respect for the founders handpicked by Partovi.

“The one [accelerator] “I like that now it has a very high signal, and every founder I’ve met there has been very smart, which is Neo,” Wesley Chan, co-founder and managing partner of FPV Ventures, said on stage at the 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, an AI-powered healthcare startup backed by NEA and Sequoia.

Neo Residency will also select five to eight students – either as individuals or small teams – who will receive an unrestricted grant of $40,000 to take a semester off to work on a project. Although there is no requirement to drop out or start a formal company right away, Partovi said he hopes the students can explore entrepreneurship and, when they eventually launch a startup, turn to NEO for funding.

Neo is keeping the program small and elite: it will schedule two annual cohorts of 20 teams each, made up of a mix of active startups and student projects.

Why does Nio offer such generous terms? “We have more confidence in our ability to attract and select the stars of the future than ever before,” Partovi said.

His track record suggests that trust is justified. He famously met Cursor co-founder Michael Troll when Troll was still a student at MIT, and later wrote one of the first checks at the AI ​​programming startup, which is now valued at about $30 billion.