Techstars’ Decision to End the JP Morgan Advancing Cities Program: A Setback for Minority Entrepreneurs and Ecosystem Builders

In a move that has sent ripples through the entrepreneurial community, Techstars recently announced the end of its JP Morgan-backed Advancing Cities Program, which was part of a larger initiative aimed at supporting underrepresented entrepreneurs. This program's termination, alongside Techstars' layoffs, marks a significant shift in how resources are being allocated within the startup ecosystem—particularly those intended to support minority-led ventures. I covered this topic from a surface level in a previous newsletter article (https://www.dhirubhai.net/feed/update/urn:li:ugcPost:7074835284260986880/ ) but will go more in-depth with tangible solutions:

A Flawed Approach from the Start

As a Black Ecosystem Builder deeply engaged in fostering innovation and entrepreneurship in underrepresented communities, this outcome while disappointing, is not entirely surprising. Many of us in the ecosystem predicted that the program would not last. The crux of the issue lies in the intellectual laziness of JP Morgan’s approach. Allocating $80 million to Techstars, a well-known but mainstream entity, rather than investing in the hundreds of Minority-led Entrepreneur-Serving Organizations (ESOs) that have been tirelessly working on the ground, reflects a disconnect from the realities of the communities these funds were intended to serve.

These minority-led ESOs are not just service providers; they are community builders who have spent years cultivating trust, understanding unique challenges, and creating tailored solutions that drive real impact. By bypassing these organizations in favor of a one-size-fits-all approach, JP Morgan missed an opportunity to create sustainable, long-term change.

The Consequences of Overlooking Grassroots Efforts

The termination of the Advancing Cities Program sets us back as an ecosystem in several ways:

1. Erosion of Trust: For minority entrepreneurs and ecosystem builders, this decision is more than just a lost opportunity; it is a breach of trust. When large institutions like JP Morgan choose to partner with big names over grassroots organizations, it sends a message that the work being done on the ground is undervalued. This can discourage collaboration and create skepticism towards future initiatives.
2. Loss of Targeted Support: Minority-led ESOs have the ears and trust of their communities because they understand the specific barriers that these entrepreneurs face. By sidelining these organizations, the program deprived minority entrepreneurs of the tailored support they need to overcome systemic challenges, access funding, and grow their businesses.
3. Stagnation of Ecosystem Growth: Ecosystem growth is fueled by the contributions of diverse, community-focused organizations. When these entities are not adequately supported, it stifles innovation and limits the overall potential of the ecosystem to thrive. This setback not only impacts the startups but also hinders the development of a robust network of support systems that are essential for long-term success.

The Path Forward: Re-Evaluating Funding Strategies

To truly advance equity in entrepreneurship, it is imperative that large financial institutions and corporations rethink their strategies for supporting underrepresented entrepreneurs. Here are a few recommendations:

1. Invest in Minority-Led ESOs: Direct funding to organizations that are already embedded within minority communities and have a proven track record of creating impact. These ESOs are the backbone of entrepreneurial ecosystems, and their work is critical to fostering inclusive growth.
2. Conduct Thorough Research: Before allocating funds, take the time to understand the landscape of ESOs. Engage with these organizations, learn about their needs, and co-create solutions that address the unique challenges faced by minority entrepreneurs.
3. Build Sustainable Partnerships: Establish long-term partnerships with minority-led ESOs rather than short-term programs. This approach not only provides financial support but also fosters deeper collaboration and shared goals.
4. Measure Impact Beyond Numbers: Evaluate success not just by the amount of capital deployed but by the real, on-the-ground impact. This includes the growth and sustainability of minority-owned businesses, the creation of jobs within these communities, and the overall health of the entrepreneurial ecosystem.

Conclusion

The ending of the Techstars JP Morgan Advancing Cities Program is a stark reminder of what happens when decision-makers overlook the invaluable work being done by grassroots organizations. As ecosystem builders, we must continue to advocate for approaches that prioritize community-driven solutions and ensure that resources are allocated in a way that truly supports and uplifts minority entrepreneurs. Only by investing in those who are "actually doing the work" can we hope to build a more equitable and thriving entrepreneurial ecosystem.

References

• TechCrunch. (2024). Techstars is laying off 17% of staff, ending JP Morgan-backed programs. TechCrunch Article