Techstars ends JP Morgan-backed programming — including DC accelerator — while laying off 17% of staff

A global company offering capital and mentoring to startups just announced it’s ending its accelerator program in the nation’s capital and several other cities at the end of this year. 

The decision is tied to the end of Techstars’ $80 million Advancing Cities fund, through which it developed nine different accelerator programs across the country. The fund was created via a partnership between the pre-seed investor and banking giant JP Morgan. 

CEO and cofounder David Cohen, who returned to run Techstars in May after the previous head stepped down due to health reasons, also announced layoffs of 17% of its workforce. 

“I know that this is sudden and upsetting and that hearing about this via email is not ideal,” Cohen wrote to staff in an email published on Techstars’ website. “Your work has fundamentally put Techstars in a position to help founders succeed. The company will benefit for years to come from the invaluable work you have done on our infrastructure, systems and processes.”

The layoffs primarily affect employees in engineering, portfolio services, and sales and partnerships, according to the email. Cohen also wrote that “accelerator teams will be largely unaffected by these actions.” 

Techstars’ accelerator in DC is one of those impacted programs, along with other Advancing Cities-supported ones in Oakland (but not its San Francisco program), New York (which still has a separate accelerator) and Miami. The planned cohort of 24 companies will still convene in September, according to media relations director Amalia Lytle. She also confirmed that no equity shares or investments out of prior Techstars Washington DC cohort companies will be pulled, but shared no further details.

The funding for Advancing Cities was already set to run out at the end of 2024 when the initial contract established in 2022 expired, TechCrunch previously reported. But the outlet said in March that the financial services firm held back on notifying Techstars leaders whether or not that funding would be renewed. 

“In 2022, the $80MM Advancing Cities Fund was announced, raised as a private placement to invest in a Techstars accelerator program focused on advancing equitable access to funding among diverse founders across the US. The fund is expected to be fully deployed by the end of this year, as planned,” a spokesperson told Technical.ly. “JPMorgan Chase remains committed to supporting founders, in Washington D.C. and across the country, through the expansion of its diverse manager network, private investments platform and engagement capabilities.” 

Adam Phillips and Darius Clair serve as managing director and program manager, respectively, for both the DC program and Techstars’ Equitech Accelerator in Baltimore. Clair did not immediately return a request for comment, while Phillips deferred to Lytle. 

This isn’t the only development shaking up the mid-Atlantic’s startup and technology sectors as of late. 

On Tuesday, the nonprofit Venture For America, a national organization that places college graduates with startups, announced this week it’s ending operations due to financial issues. 

DC digital literacy nonprofit Byte Back and Philadelphia’s Benefits Data Trust, a data- and tech-focused organization working to help people access government benefits, also both shuttered in July despite signs of financial health.

This latest news of layoffs and programming closures is part of a rocky 2024 for Techstars. The company shut down its accelerators in Seattle and Boulder earlier this year and laid off 7% of its staff. 

In the Wednesday email, CEO Cohen noted that Techstars’ current priority is not to scale programming, but to “shift all of our focus to being better for founders each and every day.”

“While this is a necessary business decision,” Cohen wrote, “it doesn’t make it any less painful.”

This article mentions JP Morgan Chase, whose startup banking arm is a Technical.ly client. That relationship has no impact on this report.