In a virtual meeting last summer, Maëlle Gavet, CEO of Techstars, was queried by senior leaders about the status of the organization’s $80 million Advancing Cities Fund, facilitated by J.P. Morgan’s Private Bank Platform. Gavet, with a composed expression, disclosed the challenging progress of the initiative. Reports and eyewitness accounts indicate that numerous issues across various programs had prompted concerns from J.P. Morgan.
Techstars had been actively investing in startups founded by underrepresented entrepreneurs since 2022, aiming to support over 400 companies. This initiative led to the launch of Techstars programs in cities such as Oakland, Atlanta, and Miami. However, by August 2023, the collaboration with J.P. Morgan had reportedly cooled due to various setbacks, not all of which were solely Techstars’ responsibility, as suggested by Gavet during the meeting.
Despite having allocated approximately two-thirds of the fund, Techstars remains hopeful about its partnership with J.P. Morgan, which Gavet described as a valuable ally in their efforts. Nonetheless, the future of the Advancing Cities 2 Fund remains uncertain, with decisions on its continuation expected last summer but still pending.
The program’s future, and potentially the roles of about 20 Techstars employees involved, hangs in balance. Techstars and J.P. Morgan have not commented on the partnership’s prospects, but Techstars emphasized the ongoing investment in 263 companies, with plans to support an additional 200.
Techstars faces operational challenges, including global program reductions, layoffs, and closures of certain accelerators. Despite these difficulties, the organization continues to prioritize support for founders of color, offering significant opportunities in a landscape where such funding is scarce.
Critiques arise regarding Techstars’ fulfillment of J.P. Morgan’s expectations for the Advancing Cities Fund, with incidents and disputes over diversity definitions and program naming contributing to tensions. Discrepancies between Techstars’ broad diversity criteria and J.P. Morgan’s more specific expectations have led to debates over the inclusivity of the programs.
Despite these challenges, Techstars remains committed to supporting underrepresented founders, with a significant portion of Advancing Cities CEOs representing diverse backgrounds. Yet, the intricacies of aligning investment priorities with diversity goals and the high turnover among Techstars’ leadership underscore the complexities of sustaining such an ambitious fund amidst a challenging fundraising climate.
