As an entrepreneur who's ridden the rollercoaster of startup life, I've seen the highs and lows, the wins, and the gut-wrenching setbacks. So, when I came across the saga of Newchip, an accelerator that was supposed to be a beacon of hope for startups, it hit me right in the gut.
Newchip, once strutting its stuff alongside the big guns like Y-Combinator, found itself in a real pickle. It's been ordered to shut down and liquidate while under the shadow of Chapter 11 bankruptcy, leaving a sea of startups high and dry. These startups, who'd shelled out anywhere between $8K to $20K, were left holding the bag with unfulfilled promises of guidance, mentorship, and the golden ticket to investors.
Now, let's talk about the elephant in the room, Andrew Ryan, the head honcho of Newchip. The guy's been accused of siphoning off money from the company's bank account to his personal one in the midst of bankruptcy proceedings. He, of course, begs to differ. But the rabbit hole goes deeper, with Ryan pointing fingers at the global tech recession, staff cuts, and a supposed conspiracy by disgruntled ex-employees to bring down the house.
BTW: here you’ll find a wordy set of excuses in a LinkedIn article, published on behalf of Andrew’s personal account. In short, he blames weak startups, greedy stakeholders, Covid, and a weak business model. But while reading this, I didn’t notice him feeling accountable for poor management or fundamental approach.
But what really grinds my gears as an entrepreneur are the disturbing accounts from former employees. Allegations of a toxic work culture, of scare tactics and deceit, and even accusations of sexual harassment against Ryan, paint a grim picture of the accelerator.
This isn't just about a startup accelerator biting the dust; it's about the basic values of trust and integrity in our startup ecosystem. As entrepreneurs, we entrust accelerators with our dreams, our sweat and tears, hoping that they can give us the leg up we need to bring our ideas to life. When accelerators like Newchip exploit that trust, they don't just leave a trail of broken startups, they shake the very foundation of our ecosystem.
The harsh truth is that Newchip, despite boasting of helping its graduates bag $2.25B in funding, left many founders feeling short-changed. Some even went as far as to brand it a scam, a chilling reminder that all that glitters isn't gold in the world of accelerators.
BTW: I remember 3-4 years ago one of the crypto fintech startups in my network was proudly putting “Newchip accelerator graduate” in all their socials and website. But when I asked them how it was in private, they confessed it was just for marketing purposes, and in reality, the Newchip program was a completely useless experience and actual waste of months of their startup life.
Their main complaints were about having literally no introductions for bizdev and fundraising out of Accelerator. Also, endless hours of online workshops, followed by endless paperwork where the startup team just had to fill in multiple forms, templates and reports every week. “It felt like they kept us busy just to be busy and hide the lack of real value behind these schoolish activities”.
You can also find plenty of Newchip reviews on the web. I don’t trust services like Trustpilot, but if you check startup forums and discussions, you’ll find plenty! For example, here is the one from Hackernews:
And even more in Reddit:
As an entrepreneur, I'm relieved that the truth about Newchip has been laid bare. It's a wake-up call for us startups to be more discerning when picking our accelerators. We shouldn't be blinded by flashy promises and jaw-dropping price tags. We should demand transparency, accountability, and real value.
At the end of the day, our dreams, our ideas, and our startups are worth more than a roll of the dice on empty promises. Let's make sure we're entrusting them to those who truly have our back, and not to those who see us merely as pawns in their game.
Thus, if you have attended any online accelerator that brings real value and helped your startup to reach KPIs, gain traction or raise funding, welcome to share it in the comments and recommend it to other founders. That's the kind of impact we should be gunning for in our startup world.