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Techstars updates investment terms to fall in line with YC
Techstars, the US-based tech accelerator that has invested in over 100 African tech startups via its various programmes, has updated its investment terms to fall in line with its main competitor Y Combinator.
Techstars, now almost 20 years old, and known for backing early-stage tech startups globally, will from now on offer companies equity funding of US$220,000, up US$100,000 on its previous deal structure.
This investment package is split into two parts. Techstars will first invest US$20,000 in exchange for five per cent equity, and the remaining US$200,000 will come through an uncapped SAFE (Simple Agreement for Future Equity) note with a “most favoured nation” clause.
This clause allows Techstars to convert the SAFE into equity at the most favourable terms to any future investor, based on the company’s next priced round, and mirrors the terms of Y Combinator’s funding model, new as of 2022.
