TechCrunch is reporting that JP Morgan has been frustrated with the performance of its partnership with TechStars, particularly in regards to diversity. The $80 million investment in the Advancing Cities program was intended to focus on underrepresented founders, but sources say that managing directors were prioritizing program acceptance based on metrics other than founder diversity.
Here are some key points from the article:
- JP Morgan is frustrated with the high staff turnover in the leadership suite at TechStars.
- Managing directors are trained to prioritize startups that they believe will graduate and land follow-on funding, rather than focusing solely on underrepresented founders.
- A percentage of managing directors’ bonuses is tied to how many of their startups fit the diversity criteria.
- JP Morgan could be waiting up to seven years for returns from the Advancing Cities program.
This partnership has been a significant investment for both parties, and its success will have important implications for the future of venture capital and startup funding.