Ali Partovi’s Neo Accelerator: Low Dilution Model Explained

Table of Contents

• 1. Neo’s low-dilution model offers startups flexible funding
• 2. Overview of Neo’s Low-Dilution Accelerator Model
• 3. Investment Structure and Terms
• 3.1 Uncapped SAFE Investment
• 3.2 Equity Stake Calculation
• 4. Comparison with Traditional Accelerator Models
• 4.1 Y Combinator’s Fixed Equity Terms
• 4.2 Andreessen Horowitz’s Speedrun Program
• 5. Benefits for Startups in the Neo Residency Program
• 5.1 Founder-Friendly Philosophy

Neo’s low-dilution model offers startups flexible funding

$750K Uncapped SAFE Terms
– Deal headline: $750,000 invested via an uncapped SAFE.
– When equity is set: at the next priced round (not on day one).
– How dilution moves: valuation-linked examples given by Neo — 5% at $15M vs 0.75% at $100M.
– Cohort size: 12–15 startups this summer; two cohorts capped at 20 teams each annually.

Overview of Neo’s Low-Dilution Accelerator Model

For top founders, accelerators have always been a trade: brand, mentorship, and investor access in exchange for meaningful early ownership. Ali Partovi—veteran investor and CEO of venture firm Neo, known for early bets including Facebook, Cursor, and Kalshi—argues that trade has become increasingly unattractive as the best teams weigh prestige against giving up 7% or even 10% before the company has truly formed.

Neo’s answer is Neo Residency, a new, competitively structured program that blends Neo’s accelerator (now four years old) with a track aimed at current college students. The pitch is straightforward: deliver the “elite accelerator” experience—community, coaching, and signaling power—while pushing dilution down and tying it to performance.

The structure is also deliberately exclusive, mixing active startups with student projects.

Partovi’s claim is that the terms are so founder-friendly they’re “not even comparable to any other accelerator.” The bet behind that generosity is selection: Neo believes it can consistently attract and identify future outliers early—an approach Partovi says he has more confidence in than ever.

Signal, Network, and Ownership Tradeoffs
Neo Residency sits in a moment where many strong teams can raise a seed round without an accelerator—so the decision often comes down to two questions:
– Is the program’s signal + network meaningfully better than what you can access directly?
– Is the ownership cost (and how it’s calculated) worth the structure, speed, and community?
Neo’s pitch is that you shouldn’t have to pay a fixed 7–10% “entry fee” to get elite support.

Investment Structure and Terms

Neo Residency’s funding mechanics are designed to shift early risk toward the investor and away from the founder—at least relative to the fixed-percentage accelerator deal that has become an industry default.

For the startup cohort entering this summer, Neo will invest $750,000 using an uncapped SAFE (Simple Agreement for Future Equity). In practical terms, that means Neo provides capital now, but its equity is determined later—at the next priced round—without a valuation cap that locks in a maximum price for the investor.

The key difference is how ownership is determined: rather than taking a fixed slice on day one, Neo’s eventual stake is tied to the valuation at the next formal funding round. If the company’s valuation is higher, Neo ends up with less equity; if it’s lower, Neo ends up with more.

That valuation sensitivity is the heart of the “low dilution” story—and the reason Neo can credibly tell high-potential founders that the cost of joining may shrink dramatically if things go well.

Understanding Uncapped SAFE Dilution
How to think about an uncapped SAFE in this specific setup (plain-English version):
1) Today: Neo wires $750,000. No equity percentage is finalized yet.
2) Next priced round: a lead investor sets a valuation and prices shares.
3) Conversion: the SAFE converts into equity using that priced-round valuation (because it’s uncapped, there’s no maximum valuation used for conversion).
4) Resulting dilution: Neo’s ownership is determined at that moment—and in Neo’s model, the outcome is explicitly valuation-linked (higher valuation → smaller %; lower valuation → larger %).
Checkpoint for founders: before signing, model at least two scenarios (a “modest” priced round and a “breakout” priced round) so you understand the range of possible dilution.

Uncapped SAFE Investment

An uncapped SAFE is often described as founder-friendly because it avoids setting a ceiling on valuation for the investor’s conversion. Neo’s version goes further in spirit: it delays equity until the next priced round and makes the dilution explicitly responsive to how the market values the company at that moment.

Partovi frames this as Neo “taking the risk up front.” The accelerator writes a large check early, before a priced round exists, and accepts that if the startup’s next round is strong, Neo’s ownership will compress.

This is a notable contrast to accelerator structures that effectively “price” early equity through fixed percentages or capped instruments. Neo’s approach is meant to feel less like selling a chunk of the company at formation and more like aligning the accelerator’s stake with the startup’s later fundraising outcome.

Equity Stake Calculation

Neo has provided concrete examples of how its stake changes with valuation at the next priced round:

• If a startup raises its next round at a $15 million valuation, Neo’s stake would be 5%.
• If that valuation is $100 million, Neo’s ownership drops to 0.75%.

This structure also means Neo does not receive its equity immediately. Instead, the SAFE converts at the next formal funding round, when valuation is established. For founders, that can matter psychologically and strategically: the cap table impact is deferred, and the eventual dilution is not a fixed “accelerator tax,” but a function of the company’s trajectory.

Comparison with Traditional Accelerator Models

Neo Residency is arriving in a world where accelerator terms are widely understood and, for many founders, increasingly scrutinized. The comparison points are clear because the dominant programs have standardized deals that are easy to benchmark.

Neo’s model stands out in two ways: more capital up front than many accelerators, and no fixed equity percentage at entry. Instead, the equity outcome is delayed and valuation-linked.

Traditional accelerators argue that fixed terms simplify decision-making and allow programs to scale. Neo is making the opposite argument: that for the most sought-after founders, simplicity is less valuable than preserving ownership—especially before product-market fit, before a priced round, and sometimes before the company is even fully formed.

Below are the two programs most often used as reference points in the current debate: Y Combinator and Andreessen Horowitz’s Speedrun.

Y Combinator’s Fixed Equity Terms

Y Combinator typically takes a fixed 7% of the company for $125,000. In addition, YC invests another $375,000 on an uncapped MFN SAFE—a “most-favored nation” clause designed to ensure early investors receive terms at least as good as later ones.

The YC structure is predictable: founders know the equity cost immediately, and YC’s brand and network are widely seen as part of what they’re buying. But predictability cuts both ways. For a founder who believes the company could quickly command a high valuation, giving up a fixed 7% early can feel expensive—particularly when the accelerator check is relatively small compared to what the company might raise later.

Neo’s pitch is that it can offer comparable signaling and mentorship while avoiding that fixed early haircut. Instead of locking in 7% at the start, Neo ties its stake to the next priced round’s valuation—so high valuations translate into lower dilution.

Andreessen Horowitz’s Speedrun Program

Andreessen Horowitz’s Speedrun program typically invests $500,000 in exchange for 10% of the startup via a SAFE note, and offers another $500,000 if the next round is raised within 18 months, at terms agreed to by the other investors.

Speedrun’s structure is more aggressive on ownership than YC’s, at least on the headline number: 10% is a meaningful portion of a young company. The follow-on component can be attractive—additional capital contingent on near-term fundraising—but it also implicitly centers the next round as a milestone.

Against that backdrop, Neo’s $750,000 uncapped SAFE looks like a different bet: more money than Speedrun’s initial check, and a stake that can shrink substantially if the startup’s next priced round is strong. For founders, the comparison is less about which program is “cheaper” in every scenario and more about which one preserves upside ownership in the best-case scenario.

Benefits for Startups in the Neo Residency Program

Neo Residency is not positioned as a financial instrument alone. Partovi is selling a full-stack accelerator experience—space, structure, mentorship, and brand—while arguing that the equity cost should no longer be the price of admission for elite support.

The program’s design emphasizes intensity and proximity. Founders will spend three months working at Neo’s offices in San Francisco’s Jackson Square district, and also participate in a two-week bootcamp in the Oregon mountains. The goal is to compress learning, tighten feedback loops, and build a cohort dynamic that extends beyond the formal program.

Neo also leans heavily on “signal.” Seed and Series A investors, the firm argues, generally have strong respect for founders handpicked by Partovi. That reputational advantage is difficult to quantify, but it’s central to why accelerators exist at all: they are not just capital providers, but filters.

Wesley Chan, co-founder and managing partner of FPV Ventures, captured that idea on stage at 2025 TechCrunch Disrupt, describing Neo as the accelerator he likes right now because it has “very high signal,” and that every founder he met there was “wicked smart.”

Residency Timeline and Fit
A practical way to picture the Residency experience (based on what’s described):
– Weeks 1–12 (San Francisco, Jackson Square): work from Neo’s offices; expect frequent mentor touchpoints and tight iteration cycles.
– Bootcamp (2 weeks, Oregon mountains): intensive, cohort-focused sprint designed to compress learning and strengthen founder-to-founder bonds.
– Ongoing: mentorship access (about 30 experienced operators) and the “signal” effect that comes from being in a small, curated cohort.
Checkpoints to sanity-check fit:
– Can your team relocate or operate effectively from SF for three months?
– Do you benefit from high-frequency feedback, or do you execute better with more autonomy?
– Is your next milestone likely to be a priced round (where the SAFE converts), and on what timeline?

Founder-Friendly Philosophy

Neo’s founder-friendly positioning is explicit. Partovi describes the Residency deal as so favorable that it can make sense even for founders “not even considering any other accelerator.”

That philosophy shows up in the way Neo frames risk. By investing $750,000 on an uncapped SAFE and accepting that its stake can fall sharply at high valuations, Neo is effectively saying: if the company becomes highly valuable quickly, the founders should keep most of that upside.

It’s also a statement about competition. In a market where top founders can often raise seed rounds directly, accelerators must justify not only their value-add but also their cost. Neo is attempting to compete on both axes: keep the prestige and community, reduce the dilution.

This article reflects publicly available information at the time of writing, including program terms and examples described by Neo and covered in the press. Deal structures may vary by cohort and can change over time, and individual company outcomes can differ significantly. If you’re evaluating a SAFE-based offer, consider modeling multiple valuation scenarios to understand the potential range of dilution.