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 million 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.

Continue to the full article –> here

The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada’s Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org