October 26, 2026
Join an accelerator when its network, credibility and investor access will get you to your next round faster or on better terms than you could manage alone, and when that is worth a meaningful slice of your company. The best-known programs take roughly 5% to 10% for their first check and add a larger uncapped SAFE that converts later. Before you sign, read the deal like any other financing: what instrument you're signing, how much of the company it really buys once everything converts, what the side letter gives the accelerator, and what you must do to take the money, such as reincorporating as a US corporation.
Key takeaways
An accelerator gives a young company a short, intense program (typically about three months), a network of mentors and alumni, a brand investors recognize and a demo day where you pitch many investors at once. The check matters less than it looks, because for many companies the fastest way to raise more money is the program's network.
It tends to be worth it for first-time founders without investor relationships, for teams in markets where a top program's brand is a strong signal, and for founders who can commit to the program fully. It's harder to justify if you already have strong investor interest at a good valuation, if the program doesn't know your sector, or if its alumni haven't gone on to raise. The value is concentrated in programs with strong track records. For the rest, judge each program on its alumni outcomes, not its marketing.
Terms change, so always read the current documents. As of October 2026, the two best-known US programs publish these standard deals.
| Y Combinator | Techstars | |
|---|---|---|
| Total investment | $500,000 | $220,000 ($120,000 in Asia-Pacific programs) |
| Fixed-percentage piece | $125,000 post-money SAFE for 7% | $20,000 convertible equity agreement for 5% common stock |
| Uncapped MFN SAFE | $375,000 | $200,000 ($100,000 in Asia-Pacific) |
| Other rights | Pro rata right in later rounds, in a separate YC agreement | Side letter covering pro rata, drag-along, information and other rights |
| Incorporation requirement | US, Canada, Cayman Islands or Singapore | US corporation or an approved foreign equivalent |
Both programs require companies incorporated elsewhere to restructure under a parent in an approved country, often called a flip, before they invest. For a US startup, the right answer is a Delaware C corporation. See Why Do VCs Require a Delaware C Corp?
Add up everything that converts. The fixed-percentage piece is easy: a post-money SAFE for 7% means the accelerator owns 7% of the company immediately before your priced round, however many SAFEs you raise in between. That's the point of a post-money SAFE. The dilution from later SAFEs falls on the founders and the option pool, not on the accelerator's 7%. See SAFE.
The uncapped MFN SAFE is where founders miscount. MFN stands for "most favored nation." An uncapped MFN SAFE has no valuation cap of its own, but it automatically takes the best terms, such as a lower cap or a discount, of any SAFE you issue after the program starts and before your priced round. If you never issue a capped SAFE, it converts at your priced round's price, like new money in that round. In practice, though, most companies raise SAFEs after demo day, and the cap on those SAFEs sets the price of the accelerator's larger check too.
Example. A company joins YC and receives $125,000 for 7% and $375,000 on the uncapped MFN SAFE. After demo day it raises $1,500,000 on post-money SAFEs with a $15,000,000 cap, which buys 10%. The MFN SAFE picks up the $15,000,000 cap, so YC's $375,000 buys another 2.5%. Going into the priced round, the SAFE holders own 19.5% of the company (7% plus 2.5% plus 10%), and the founders and option pool own 80.5%. If the company had instead set a $10,000,000 cap on its post-demo-day SAFEs, the MFN SAFE would convert at that cap too, and YC's $375,000 would buy 3.75% instead of 2.5%. Every later SAFE cap you agree to also prices the accelerator's money. See Valuation Cap.
The priced round then dilutes everyone, including the accelerator, through the new money and any increase to the option pool. See Option Pool Shuffle.
Some programs, especially those that buy common stock outright, protect their percentage with a top-up. If the company issues new shares before a set event, it must give the program enough extra shares, for nothing, to restore its percentage. Every top-up share is paid for by the founders and the other holders. This is different from the anti-dilution protection on preferred stock, which adjusts for a lower price, not a lower percentage. See Anti-dilution.
These clauses aren't standardized, so read the one you're offered. They differ in what triggers a top-up and what ends it. A narrow version protects the program only against new shares issued to the founders themselves. Others also cover new co-founders and option pool increases, but not shares sold to investors. A broad version can cover every issuance, including grants, pool increases and new investment, until a priced round above a minimum size closes. Some end the protection at any financing above a minimum size, SAFE rounds included, though depending on the drafting, SAFEs from that financing may still trigger a top-up when they convert. Full protection until a priced round makes the program's stake behave like a post-money SAFE: every SAFE, grant and pool increase before that round comes out of everyone else's share. And if only a priced round ends it, raising your seed on SAFEs keeps it running. The two programs in the table above use fixed-percentage instruments rather than top-up shares, but the effect on SAFEs raised before the priced round is similar. YC's 7% post-money SAFE and Techstars' 5% convertible equity agreement each hold their percentage through any SAFEs you raise before a priced round (for Techstars, one of at least $1,000,000), and both programs say the priced round's new money and option pool increases dilute them, so check how the instrument treats a pool increase made before that round.
Example. A company has 8,000,000 fully diluted shares. Two founders hold 3,300,000 each, the option pool holds 1,000,000, and a program holds 400,000 (5%) with full protection until a priced round. Before that round, the company adds 1,000,000 shares to the pool and issues 500,000 shares to a new co-founder. Without protection, the program would hold 400,000 of 9,500,000 shares, about 4.21%. With it, the company must issue about 78,947 top-up shares, so the program holds about 478,947 of 9,578,947 shares, still 5%. Each original founder falls to about 34.45% instead of 34.74%, and the gap grows with every issuance until the protection ends.
The instrument. A SAFE, a convertible equity agreement and an outright purchase of common stock behave differently. Know when each converts (some convert only at a priced round above a minimum size), what it converts into, and what happens if you're acquired or shut down before then.
The side letter or program agreement. This is where the accelerator gets rights beyond the instrument, such as a pro rata right to invest in later rounds, information rights, and sometimes an agreement to vote with the majority in a sale. Pro rata rights are reasonable for an investor of this kind, but know how they will fit with your lead investor's allocation in the next round. See Pro Rata Rights.
Fees and obligations. Leading programs don't charge participation fees. Be cautious about any program that asks you to pay to participate, or to buy services from its sponsors. Check what you must attend, whether you must relocate, and what reporting you owe afterward.
Conditions to funding. Know whether any of the money depends on milestones or on completing a restructuring first, and how long a flip will take if you need one.
Your first priced round is when the program should become an ordinary investor. Check that each of these ends when that round closes: any top-up or other anti-dilution protection, any right to approve a sale of the company, a new option plan or other company decisions, and any special investment right beyond an ordinary pro rata right, such as a right to buy a fixed dollar amount of later rounds. From then on, the program should hold the same rights as other investors of its size under the round documents. A continuing pro rata or participation right, like YC's, is a normal term to plan around. Your lead investor will ask about anything that survives the round and may make a waiver a condition of closing.
Do real diligence. Talk to founders from several recent batches, including some whose companies didn't make it, and ask how much of the program's promised support actually showed up. Look at where alumni raised next and from whom, whether the mentors have built companies in your sector, and how many serious investors come to demo day. A program in your target market or sector can be worth more than a bigger brand that doesn't know your customers. And weigh the opportunity cost. Three months of program work is three months of your company's early life. If a venture studio offers to build the company with you instead, see Should I Give a Venture Studio a Large Stake in My Startup?
Go deeper: For a full walkthrough of SAFEs, see our Founder Guide to SAFEs.
For related topics, see 6 Types of Investors in Startups, Venture Capital 101, Startup Funding Stages and Equity Dilution.
If you'd like an accelerator's documents reviewed before you sign, or need to set up a Delaware C corp first, contact us.
