Inside the ‘cold war’ at Techstars as CEO Mäelle Gavet hires, fires, fights to force change | TechCrunch

🌈 Abstract

The article discusses the challenges faced by Techstars, a prominent startup accelerator program, under the leadership of CEO Maelle Gavet. It covers the following key points:

🙋 Q&A

[01] Techstars Stockholm Shutdown

1. What happened with the Techstars Stockholm accelerator program?

• The Techstars Stockholm accelerator program was shut down temporarily during the 2023 SVB collapse, causing chaos for the founders in the program.
• Techstars CEO Maelle Gavet ordered the managing director Alfredo Jollon to take down a LinkedIn post expressing support for SVB, which he initially refused to do.
• Jollon was eventually fired, and the founders were told to go home, but they protested and convinced Techstars to reinstate the program, though Jollon did not return.

2. How did Techstars' leadership react to the SVB collapse?

• Techstars had a sizable deposit at SVB, and there was uncertainty about whether those deposits would be wiped out.
• Gavet wanted to avoid publicizing Techstars' relationship with SVB, leading to the confrontation with Jollon over his LinkedIn post.
• The shutdown of the Stockholm program was seen as an extreme reaction, but it was not unusual under Gavet's leadership, according to multiple sources.

[02] Techstars' Organizational Changes

1. What changes did Maelle Gavet make after becoming Techstars CEO?

• Gavet shut down departments and terminated management teams shortly after becoming CEO.
• She tried to implement KPIs based on the number of startups a managing director could source, which was seen as an "astonishingly bad idea" that would prioritize quantity over quality.
• Gavet hired several executives, including Marie Moussavou and Aparna Ramaswamy, who lacked extensive startup and venture capital experience.

2. How did the bear market impact Techstars?

• As the industry's pandemic-era growth began to retreat, Techstars faced financial challenges.
• Employees feared that "any position not directly connected to revenue generation could be on the chopping block," and layoffs and program shutdowns followed.
• The remote-working culture and lack of team bonding contributed to a sense of isolation and gloom among Techstars employees.

[03] Tensions Between Leadership and Managing Directors

1. What was the relationship like between Techstars leadership and managing directors?

• Under previous CEO David Brown, managing directors had significant autonomy and control over their programs.
• Gavet sought to centralize power and control, leading to a "cold war" between leadership and managing directors.
• Managing directors faced the threat of losing their carried interest if they were ousted and did not comply with Techstars' requirements.

2. What happened with the Techstars Stockholm program and its managing director Alfredo Jollon?

• Jollon was fired after the confrontation over his LinkedIn post, and Techstars tried to shut down the Stockholm program.
• The founders protested and convinced Techstars to reinstate the program, but Jollon did not return.
• The founders were then offered a new contract that no longer included an equity-back guarantee clause.

[04] Techstars' Cost-Cutting and Culture

1. How did Techstars' cost-cutting measures impact the company?

• Techstars terminated its entire ESG team with little warning and no explanation, spreading fear among employees.
• The company's move to a new office in New York faced issues like backed-up sewage and lack of cleaning services, leading to a poor work environment.
• Employees described a "punitive culture of gaslighting, threats, dissension, and dysfunction," with high turnover among senior leadership and managing directors.

2. What was the impact on Techstars' partnerships and programs?

• Several corporate partners, including Northeastern University's Roux Institute, Melinda French Gates' Pivotal Ventures, and the Louisiana Economic Development Agency, decided not to renew their partnerships with Techstars.
• Techstars also shut down programs in cities like Seattle and Boulder, and paused programs in Toronto and Oslo.

[05] Techstars 2.0 and the Future

1. What is Techstars 2.0, and how does it change the organization?

• Gavet rolled out Techstars 2.0, which features a more centralized investment committee and a new job structure for managing directors.
• Managing directors will now focus on helping founders fundraise, while other teams will handle local ecosystem engagement and educational content development.
• The plan calls for fewer programs in fewer cities, with a focus on larger ecosystems like New York and San Francisco.

2. What is the current state of Techstars, and what are the uncertainties about its future?

• Techstars has successfully raised a new $50 million fund, and cost-cutting has helped the company end the year with nearly $50 million in operational cash.
• However, uncertainty remains about whether more cuts are coming, and there is speculation about Gavet's plans for the company, such as a potential public offering or sale.
• The sentiment among most sources is to wait and see whether Gavet's decisions will prove justified or if she will be seen as an "ax-wielding villain."