Ali Partovi’s Neo seems to upend the accelerator mannequin with low-dilution phrases
For probably the most sought-after founders, the status of a top-tier accelerator is more and more weighed in opposition to giving up a big possession stake of their firm.
Ali Partovi, the veteran investor and CEO of enterprise agency Neo, needs to supply the mentorship and group for some of the elite accelerator packages—without forcing the very best up-and-coming tech leaders at hand to hand over 7% and even 10% of their firm earlier than they’ve even begun.
Partovi, who is known for his early investments in Fb, Cursor, and Kalshi, has simply launched Neo Residency, a brand new, competitively structured program that mixes the agency’s now four-year-old accelerator with a monitor for present faculty college students.
The phrases that Neo Residency gives are so founder-friendly as to be “not even corresponding to some other accelerator,” Partovi advised Naijatrend.
For the cohort of 12 to 15 startups getting into this system this summer season, Neo will make investments of $750,000 by way of an uncapped SAFE—a contract that provides an investor future fairness in exchange for cash now, with no ceiling on the valuation used to calculate that stake. In contrast to the fixed-percentage offers typical of different accelerators, Neo won’t obtain its fairness till the corporate’s subsequent formal funding round, and even then, the dilution is tied to valuation. If a startup raises its subsequent spherical at a $15 million valuation, Neo’s stake shall be 5%, but when that valuation hits $100 million, the agency’s possession drops to only 0.75%.
“We take the chance up front, so that is extraordinarily favorable to startups,” Partovi mentioned.
In comparison, Y Combinator usually takes a hard and fast 7% of the corporation for $125,000, with another $375,000 invested on an uncapped MFN—or most-favored nation—SAFE, a clause that ensures early traders get phrases a minimum of nearly as good as these given to later ones. In the meantime, Andreessen Horowitz’s Speedrun program usually invests $500,000 in exchange for 10% of the startup by way of a SAFE note, and another $500,000 if the subsequent round is raised within 18 months at whatever terms are agreed to by the other investors.
“We’re providing a deal so nice that it’s applicable even for founders who are usually not even contemplating some other accelerator,” Partovi mentioned.
The decrease in fairness price is barely 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 within the Oregon mountains, and be mentored by about 30 skilled operators, together with Russell Kaplan, president of Cognition, and Fuzzy Khosrowshahi, CTO of Notion (and the creator of Google Sheets and, in addition, Partovi’s uncle).
However, this system’s important draw is its status: Seed and Sequence Traders usually have nice respect for founders handpicked by Partovi.
“The one [accelerator] I like proper now that has very excessive sign, and each founder I met there’s simply depraved sensible, is Neo,” Wesley Chan, co-founder and managing accomplice of FPV Ventures, mentioned on stage at 2025 Naija Trend Disrupt.
Startups which have gone via this system embrace Second, a fintech firm that has raised $56 million from traders like Andreessen Horowitz, and Anterior, a healthcare AI startup backed by NEA and Sequoia.
The Neo Residency will even choose 5 to 8 college students—either as people or small groups—who will obtain a $40,000, no-strings-attached grant to take a semester off to work on an undertaking. Whereas there isn’t a requirement to drop out or begin a proper firm instantly, Partovi mentioned he hopes the scholars will catch the entrepreneurial bug and, after they ultimately launch a startup, flip to Neo for funding.
Neo is retaining this system as small and elite: it is going to cap its two annual cohorts at 20 groups each, consisting of a mixture of energetic startups and scholar initiatives.
Why is Neo providing such beneficent phrases? “Now we have extra confidence in our capability to draw and pick future superstars earlier than ever before,” Partovi mentioned.
His monitor file means that confidence is well-founded. He famously met Cursor co-founder Michael Truell, who was nonetheless an MIT scholar and later wrote one of the first checks into the AI coding startup, now valued at almost $30 billion.
