Global investment firm Techstars will shutter its D.C.-based accelerator program for underserved founders by year's end because the money for the program has run out.
David Cohen, the CEO of Boulder, Colorado-based Techstars, told employees in an email last week that the $80 million it raised from J.P. Morgan Private Bank in 2022 to fund accelerators in nine cities is "fully deployed" and that the programs are coming to an end.
The announcement came in the same email in which Cohen said Techstars has become "overbuilt" in recent years and is cutting its workforce by 17%.
"We built a business with the capacity to support thousands of new investments annually but the reality is that we have been investing in around 700 startups a year," Cohen said in the email. "We are going to stop focusing on scaling and shift all of our focus to being better for founders each and every day."
In March 2022, Techstars launched its Advancing Cities fund with the investment from J.P. Morgan. It said at the time that the initiative — open to all backgrounds but with intentions to better aid Black, Hispanic and Latino, Indigenous American and Pacific Islander entrepreneurs — would support 450 early-stage startups via 37 accelerator programs in nine U.S. cities over the span of two years.
D.C. was among the cities selected for the accelerator program. The initial cohort featured founders of seven D.C.-area startups; since then 28 other local founders have since gone through the program. The D.C. accelerator will host one more cohort of 24 founders in September before funding is exhausted.
J.P. Morgan-branded accelerators in Atlanta, Chicago, Los Angeles, New York and other cities will also be phased out by year's end.
J.P. Morgan Private Bank, a unit of JPMorgan Chase & Co. (NYSE: JPM), had considered extending the program but its relationship with Techstars reportedly soured after Techstars failed to meet certain diversity metrics laid out by J.P. Morgan, according to a March report from TechCrunch.
JPMorgan Chase declined to discuss its relationship with Techstars or the end of the co-branded accelerators. In a statement, the company said it remains committed to backing startups and entrepreneurs of underserved backgrounds in the region. The banking giant made a $5.5 million commitment in April 2023 to help underrepresented small businesses in D.C.’s Anacostia and Congress Heights neighborhoods. More than half of that funding will go toward the Congress Heights Community Training and Development Center for the buildout of the D.C. Entrepreneurship, Innovation & Venture Hub, which is being designed primarily to help Black women-owned businesses get access to capital.
"JPMorgan Chase remains committed to supporting founders in the Greater Washington region through the expansion of its diverse manager network, private investments platform and engagement capabilities," a spokesperson told me in an email. "As we continue to expand our presence locally, we remain focused on empowering founders and working with startups and high-growth companies within our tech community."
