Accelerator offers are short documents with long consequences. Two programs can advertise the same headline and give you very different companies five years later. Learn the vocabulary once and you will read any term sheet in minutes.
The four structures you will see
1. Post-money SAFE
A SAFE (Simple Agreement for Future Equity) is not stock — it is a promise to convert into shares at your next priced round. It is the most common accelerator instrument because it is fast and cheap. The "post-money" version, popularized by Y Combinator, fixes the investor's ownership after the money goes in, which makes your dilution predictable but also locks it in.
2. Priced equity
The program buys actual shares now at an agreed valuation — common with programs like Techstars and many university accelerators. Cleaner ownership picture today, but it requires setting a valuation early.
3. Token / warrant
Crypto and web3 programs (e.g. Alliance DAO, Outlier Ventures) may take a token warrant — the right to buy tokens — alongside or instead of equity. See token-deal programs →
4. Grant / equity-free
Grants and prizes (e.g. AI Grant, MassChallenge) give cash or credits and take nothing. Watch for strings instead of dilution: relocation requirements, milestones, or IP conditions. See grant programs →
| Structure | You give up now | Best when |
|---|---|---|
| Post-money SAFE | Nothing until next round; fixed % later | You want speed and predictable dilution |
| Priced equity | Shares today | Valuation is already sensible |
| Token warrant | Future token rights | Token is core to the business |
| Grant | Nothing (watch for conditions) | You need non-dilutive runway |
The two clauses that quietly matter
Post-money valuation cap
The cap sets the maximum valuation at which a SAFE converts. A lower cap means the program owns more of you later. It is the single biggest driver of real dilution — read it before the headline percentage.
MFN ("most favored nation")
An MFN clause lets an early investor automatically take the best terms you later give anyone else. YC's standard $500K, for example, is $125K for 7% plus $375K on an uncapped MFN note — meaning that second tranche adopts your next round's terms. It protects the investor; know it is there.
Once you can read the terms, the question becomes whether the number is reasonable for what you get. That is exactly what the next guide covers.
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