Techstars is shedding 17% of its workforce and can finish its $80 million J.P. Morgan-backed AdvancingCities program as soon as the fund is totally deployed on the finish of this yr, TechCrunch has discovered.
The AdvancingCities program, which launched in 2022, noticed the launch of accelerator packages throughout the nation in cities like Oakland, New York, Miami and Washington, D.C. with the objective of backing extra numerous founders.
J.P. Morgan sponsored this system with a dedication by way of December, however the relationship between the financial institution and Techstars soured nearly instantly, as TechCrunch beforehand reported. The financial institution was presupposed to decide to persevering with this system final summer time so Techstars might begin fundraising for one more spherical with the hope of deploying capital from the second spherical in 2025. But it surely didn’t commit by that earlier deadline. As of our earlier report, the destiny of round 20 Techstars staff who labored on this system was unclear.
“In 2022, J.P. Morgan introduced the $80MM Advancing Cities Fund, raised as a non-public placement to put money into a Techstars accelerator program targeted on advancing equitable entry to funding amongst numerous founders throughout the U.S,” a J.P Morgan spokesperson informed TechCrunch. “The fund is predicted to be totally deployed by the tip of this yr, as deliberate. JPMorganChase stays dedicated to supporting throughout the nation by way of the enlargement of its numerous supervisor community, non-public investments platform and engagement capabilities.”
The information that this system was formally shut down was reported on Wednesday by The Data.
In an e-mail in regards to the layoffs, Techstars co-founder and CEO David Cohen informed workers that the startup accelerator “overbuilt and over employed.” He stated that a lot of the layoffs would come from engineering, assist providers and people engaged on gross sales and partnerships. He promised that these operating most accelerator packages wouldn’t be impacted aside from the J.P. Morgan packages, particularly the AdvancingCities program.
The information comes throughout a transformative yr for Techstars. Techstars’ now-former CEO Maëlle Gavet stepped down in Might, with Cohen stepping again into the position upon her departure. Wednesday’s layoff additionally follows a 7% headcount discount in January, as TechCrunch beforehand reported.
Techstars’ technique underneath Gavet was to scale into extra packages and again extra startups, nevertheless it was met with criticism from these within the funding group because the group started earlier this yr to restructure itself. Cohen considerably addressed the criticisms in that e-mail to workers right now, saying that the agency would now “cease specializing in scaling and shift all of our focus to being higher for founders every day.”
Techstars declined additional remark however pointed to Cohen’s e-mail which it revealed on its web site.
