Startups joining the Global Insurance Accelerator’s 2020 cohort will be the first cohort experiencing a newly revamped funding structure and a recently raised investment. 

Startups will receive an investment of $75,000 through a post-money Simple Agreement for Future Equity (SAFE), which converts to 5% of the startup. It’s an increased investment from the $40,000 the GIA has previously offered for 6% common equity. Housing for at least one representative of every startup at the nearby Staybridge Suites is entirely covered through the investment bump. 

The change comes as the GIA considers its competitiveness in a growing fintech and insuretech accelerator market five years after the organization was founded, managing director Nicole Gunderson said. 

“The market has changed for accelerators, but also we are growing. Right now we’ve got 36 companies who have been a part of the first five years of the annual program,” she said. “For us to continue to attract the quality of companies that we want to be a part of our program, we need to take a closer look at that.” 

The SAFE agreement was launched by the national seed accelerator YCombinator in 2013 to deliver early-stage fundraising, and is touted by YCombinator as a way to immediately calculate how much ownership of a fundraising company has been sold. (YCombinator has made all of its SAFE documents, including the Safe User Guide, public online for review by other accelerators, startups and investors.)

The GIA could have raised funding per startup without changing the funding’s structure, but transitioning to SAFE simplifies future growth for the accelerator, Gunderson said. Through YCombinator’s national reputation, most entrepreneurs and investors are familiar with the structure, she added. 

“The goal of it is to really be equal and friendly to both parties at the stage of investment,” Gunderson said. “You don’t want to overcomplicate it for anyone.”

The mentorship-first program model has not changed, she added. Applications to the 2020 cohort closed on Oct. 23, and the GIA is in the midst of the internal selection process. Final selections will be announced publicly in January, just before the startups arrive for the accelerator’s start on Jan. 14. 

“It’s an exciting time where we have five years of the GIA under our belt, we’re going into the sixth year. There’s way more activity in this space then there’s ever been, so it allowed us to kind of sharpen our pencils and put out there what we thought was the best way to help our startups,” Gunderson said.