Quick Summary
Techstars is updating its accelerator deal to offer $220,000 to startups — a move that brings it in line with top programs like Y Combinator. The new structure includes $20K for 5% equity and $200K via a SAFE note. The change aims to give founders more capital and better terms. Though its Africa programs have ended, startups from Nigeria and Kenya continue to benefit from Techstars’ global network and early support.
Techstars Now Offers $220K to Startups — Closing the Gap with Y Combinator
After nearly 20 years of supporting early-stage founders are making a major change. Starting with its Fall 2025 cohort, the accelerator will increase its funding offer to $220,000 — up from the previous $120,000.
What’s New in the Deal?
The new standard deal includes:
- $20,000 for 5% equity – This remains unchanged from Techstars’ traditional model.
- $200,000 through an uncapped SAFE note – This includes a “most favored nation” (MFN) clause. This means Techstars will convert its investment under the best terms offered to future investors.
Example:
If a startup later raises funds at a $10 million valuation, Tech’s SAFE converts into 2% equity. Combined with the initial 5%, Techstars would hold a 7% stake.
Why the Change?
According to Techstars Founder and CEO David Cohen, the new deal gives startups more money, better alignment, and a simple, transparent structure.
“Founders get more capital and arrive at their next funding round with stronger momentum,” Cohen shared in an investment update.
He also noted that demand for Techstars programs has tripled since 2021. This surge comes from the value founders see in Techstars’ mentorship, funding, and access to its global network.
The Bigger Picture
So far, Techstars has backed companies that have raised more than $30 billion in total funding. These companies are now worth over $120 billion, including:
- 21 unicorns
- 118 startups currently valued at over $100 million
Techstars Moves Closer to YC
This update brings Techstars closer to Y Combinator’s offer, which gives:
- $125,000 for 7% equity
- $375,000 via SAFE on standard terms
Although YC offers more capital overall, Techstars now provides a lower initial equity take and a more flexible SAFE. This could be more appealing to founders depending on their funding plans.
Techstars in Africa: A Short but Impactful Run
Techstars’ time in Africa may have been brief, but it left a lasting impression.
Nigeria’s ARM Labs Lagos Techstars Accelerator
Launched in 2022, this program supported 24 startups across two cohorts. Each received $120,000 in funding, mentorship, and global exposure.
Notable alumni include:
- Surge Africa – A logistics platform that connects businesses with affordable delivery services
- PressOne Africa – A digital media hub for engaging news and content
- GetEquity – A platform helping Africans invest in startups
Though the Nigeria program ended in 2024, the resources and visibility it offered helped these startups grow.
Success in Kenya
In Kenya, Duhqa, a logistics and supply chain startup, joined Toronto. The startup later secured $2 million in seed funding.
Which Is Better for Startups: Techstars or YC?
With the new $220K deal, Techstars is narrowing the gap with Y Combinator. YC still offers more total capital, but Techstars may be more appealing to some founders due to its structure and lower upfront dilution.
For African founders, Techstar’s brief presence in Nigeria was a sign of global interest in the region. Even though the program ended early, many of its startups continue to benefit from the funding and networks it provided.
