Ali Partovi’s venture firm Neo is taking direct aim at the standard accelerator playbook, unveiling Neo Residency with funding terms designed to slash founder dilution. Instead of the usual fixed 7% to 10% equity swaps, Neo will invest $750,000 via an uncapped SAFE that converts at a startup’s next priced round, letting ownership float with valuation rather than locking it in on day one.
The math is stark. If a company prices its next round at $15 million, Neo converts to roughly 5%. Raise at $100 million, and Neo’s stake shrinks to about 0.75%. Partovi’s bet is simple: take risk early, give founders more room on the cap table, and win access to the outliers that drive venture returns.
How Neo’s Terms Rewrite Accelerator Math
An uncapped SAFE without a discount converts at the same price as the new money in the next equity round. That means Neo’s equity is determined by the valuation founders secure later, not a flat percentage fixed today. In a market where Carta has reported median US seed pre-money valuations hovering around the low- to mid-teens, a typical seed could translate to ~5% dilution for this $750,000 check—already less than many accelerator packages. If founders surge to a higher price, dilution from Neo falls further.
By contrast, the most copied accelerator deal remains $125,000 for a fixed 7% plus an additional $375,000 on an uncapped MFN SAFE, which ensures early investors match the best terms a company later grants. Andreessen Horowitz’s Speedrun program generally commits $500,000 for 10% via a SAFE, with a potential $500,000 follow-on if a round is raised within 18 months. Neo’s structure flips this script: more upfront capital, no fixed ownership, and upside in founders’ hands if they can command stronger valuations.
Prestige And Programming As The Hook For Founders
Neo isn’t only selling terms. Residency blends its accelerator with a selective student track and a heavy emphasis on operator mentorship. The summer cohort expects 12 to 15 startups for a three-month on-site stint in San Francisco’s Jackson Square, anchored by a two-week Oregon mountain boot camp. Around 30 seasoned leaders, including Cognition president Russell Kaplan and Notion CTO Fuzzy Khosrowshahi (the creator of Google Sheets), will coach founders.
On the student side, five to eight individuals or small teams will receive $40,000, no strings attached, to take a semester off and build. There’s no formal requirement to incorporate, drop out, or raise immediately; the wager is that early exposure to company building converts future founders who will eventually return to Neo for capital. Across two annual cohorts, the program will cap participation at about 20 teams to keep selection tight and attention high.
Signal matters here, and Neo’s alumni list is doing the talking. Moment, a fintech startup, has raised $56 million from top-tier investors, while healthcare AI company Anterior counts NEA and Sequoia among backers. Partovi’s early check into AI coding startup Cursor—after meeting co-founder Michael Truell while he was still at MIT—adds to the firm’s aura, with Cursor now reportedly approaching a multibillion-dollar valuation.
What Low Dilution Means For Startup Cap Tables
For founders, every early point of ownership conserved translates into option pool flexibility, hiring leverage, and less friction in future rounds. A fixed 7% to 10% accelerator bite can box in pool expansions or force tougher trade-offs at seed or Series A. Neo’s variable ownership helps keep the cap table cleaner if momentum builds, which can also make a company more attractive to later-stage investors who scrutinize founder ownership and governance.
There are trade-offs. An uncapped SAFE offers Neo no downside protection if the next round prices modestly, and conversion depends on a future financing or liquidity event. But for a firm confident in picking outliers, the brand, mentorship, and selection advantage may outweigh the risk of ending up with sub-1% stakes in breakout winners. For founders who never considered accelerators due to dilution, Neo’s offer could redraw the decision boundary.
The Accelerator Arms Race Intensifies Among Programs
Over the past two years, accelerators have increased check sizes and layered in advisory programs to justify double-digit ownership asks. With seed valuations resilient by historical standards, the old trade of capital-for-brand looks less compelling to elite founders. Neo’s Residency raises the bar: it pairs a curated network with terms that scale founder-friendly outcomes as valuations rise.
The next test arrives with this summer’s cohort. If Residency companies convert their head start into strong seeds and clean follow-on rounds, expect copycats—and more pressure on accelerators that still demand a fixed chunk up front. For now, Neo has thrown down a marker: prestige and community can be priced in ways that protect founder ownership, not preempt it.
