Hi, this is Wayne again with a topic “Newchip, Techstars, and what happens when startup accelerators fail | TechCrunch Minute”.
The Venture downturn is a lot more than just falling investment levels around the world. We are seeing turbulence at the very companies that have been built to help startups do more and faster. So today I have two stories for you: one about new chip and one about Tech Stars. So after starting life as an aggregator of deals from Equity, crowdfunding Services, techch writes that new chip later evolved into an accelerator that promised to help startups, grow their companies and meet investors for a hefty fee, and that should be warning sign number one. When we think about new chip, but it wasn’t the only issue – there were operational problems, refund issues, a blistering management style, firings and more that eventually led to new chip, Landing itself in bankruptcy, fining for chapter 11 protection and then that later morphing into chapter S, liquidation And really guys, this is a mess. Part of the new chip deal in many cases was a quar million dollars worth of options to buy shares in startups. That went through its program and now those warrants as they’re called, are wrapped up in the bankruptcy case and that mess has actually caused startups to fail.
Hot mess on stilts, I think, is the verdict here. The failure of new chip – you might recall, actually kicked off about a year ago, but recent Tech, R reporting details the long-term damage it has caused to many upstart tech companies and then there’s Tech Stars. It’S a well-known accelerator group that invested in startups around the world. Both through geographically focused programs and also efforts tied to corporate sponsors who wanted to see companies build in and around their core work, you know if you’re, a big Aerospace company, maybe you fund an aerospace, startup accelerator with tech stars that sort of thing now today, techstars Remains in business is big and has lots of portfolio companies to its name, but since it went through a leadership swap a couple of years ago, techar has been going through a long and painful revamp. As a result, some programs have been shuttered. Some key folks are out and the entire operation is working to create a new and more efficient version of itself.
Unlike new chip, techstars is still investing money into startups. You know the thing that accelerators and other players in the larger VC landscape are supposed to do, but its tough few years are now part of the record thanks to incredibly detailed work by the tech, runch crew. Now, no matter what a company does reporting on difficult leadership is never a lot of fun, but when it comes to accelerators it’s especially a bummer, because the ramifications go Way Beyond just the employees at that company, the startups affected and their employees kind of get the Brunt of leadership, mishaps and there’s something to be said here for accelerators and the responsibility that they have to founds because they are there to help by definition, it’s actually in their name.
They are there to help accelerate, and that means that they really need to have their own house in order based on everything that I can read. Nude chip is cooked. Tech Stars, however, is just working to heal, which is is very, very different, but neither situation seemingly sets up. Why combinator to see a real challenge for its current top spot, a top the startup accelerator charts and that’s too bad, because more competition would be more better for more startups. I’Ll talk to you tomorrow, .
