Techstars will reduce its workforce by 17% and conclude its $80 million J.P. Morgan-backed AdvancingCities program once the fund is fully deployed at the year’s end
The AdvancingCities program, initiated in 2022, aimed to support a broader range of entrepreneurs by establishing accelerator programs in cities such as Oakland, New York, Miami, and Washington, D.C., across the country.
J.P. Morgan sponsored the program commitment until December. However, the relationship between the bank and Techstars soured almost immediately, as TechCrunch previously reported.
The bank was expected to commit to the program’s continuation last summer to enable Techstars to commence fundraising for a subsequent round, with the anticipated deployment of capital from the second round in 2025.
However, it failed to comply with the earlier deadline. At the time of our previous report, the fate of approximately 20 Techstars employees involved in the program was uncertain.
“J.P. Morgan announced the $80MM Advancing Cities Fund in 2022, which was raised through a private placement to invest in a Techstars accelerator program that is dedicated to promoting equitable access to funding for diverse founders throughout the United States,” a spokesperson for the company informed TechCrunch.
“The fund is anticipated to be fully deployed by the end of the year, as originally intended.” JPMorgan Chase is dedicated to supporting clients nationwide by enhancing its engagement capabilities, private investments platform, and diverse manager network.
The Information reported on Wednesday that the program had been officially terminated.
David Cohen, the CEO and co-founder of Techstars, informed his staff in an email regarding the redundancies that the startup accelerator had “overbuilt and overhired.”
Image Credit: TechPoint Africa
He stated that most of the cutbacks would be made in engineering, support services, and sales and partnerships. He guaranteed that most accelerator programs would not be affected, except for the AdvancingCities program operated by J.P. Morgan.
The announcement is made amid a year that has been transformative for Techstars. Cohen resumed her position as CEO of Techstars following the resignation of Maëlle Gavet in May.
The layoff on Wednesday also continues a 7% personnel reduction in January, as previously reported by TechCrunch.
Gavet’s strategy for Techstars was to expand into additional programs and support more businesses. However, the investment community criticized the organization as it began to restructure itself earlier this year.
Cohen somewhat made criticisms in the email to staff today, stating that the firm would now “stop focusing on scaling and shift all of our focus to being better for founders every day.”
Techstars declined to provide additional commentary, but it did refer to Cohen’s email, which it had posted on its website.