Mahi Sall, Advisor, Fintech-Bank Partnerships, Payments and Financial Inclusivity
January 25th, 2023
Mahi Sall is the CEO & Founder of FinXpair, a Berlin-based strategic advisory boutique firm focu[...]
Newchip Online Accelerator Hits a Dead-end: Files for Chapter 7
TechCrunch | Mary Ann Azevedo, Christine Hall | May 19, 2023
Image: Freepik/onlyuqj
Once a promising online accelerator, Newchip has filed for Chapter 7 bankruptcy following Chapter 11 filings earlier this year.
- Bankruptcy and Insolvency:
- The company reported assets of $1.7 mill\ion against liabilities of $4.8 million. A history of financial losses and inability to raise significant funds contributed to Newchip's financial distress.
- Employee Unrest and Mismanagement:
- Discontent among employees and clients escalated over time, leading to a significant walkout demanding the resignation of founder and CEO, Andrew Ryan. Accusations of mismanagement, aggressive behavior, and poor leadership decisions were chief among the reasons cited by the ex-employees.
See: The Use of Cryptocurrency in the Fundraising and Venture Capital Industry
- Customer Dissatisfaction:
- Startups that signed up for Newchip's services expressed dissatisfaction with the high fees and lack of promised services.
- The reluctance and difficulty in obtaining refunds from the company further tainted Newchip’s reputation.
- Newchip’s business model of aggregating as many startups as possible, regardless of their stage of development, was criticized as prioritizing profit over value delivery.
- Leadership Style:
- Ryan's leadership approach, characterized by a "military mindset," was questioned by both employees and founders participating in the accelerator program. His responses to the allegations suggested an acknowledgment of some shortcomings, however, the overall impact of his leadership style appeared detrimental to Newchip's working environment.
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