It sounds like the accelerator bubble is constricting right on schedule. According to an email obtained by Valleywag, Eugene Chung, who was hired to replace David Tisch as managing director of TechStars New York in January, has been fired. The departure comes two weeks before the accelerator's upcoming Demo Day, which in years past has been an orgy of oversubscribed startups and was the subject of a reality series on Bloomberg TV.
In the email (below), Nicole Glaros, who was shipped in from Boulder to act as interim managing director, carefully avoided the word fired, but "the home stretch," as she says, is hardly the time to kick a manager to the curb—especially considering that investors had already expressed doubts both about the caliber of TechStars companies and their abilities to raise funding.
VCs that say the elite Y Combinator is the only program that matters, but in the next breath complain that it is an “over-fished pond,” with too much investor interest driving up valuations.
Presumably, the un-awesome should go right ahead.
Sources told Valleywag that there was widespread dissatisfaction with Chung, who was chosen by TechStars CEO David Cohen from a pool of 35 candidates. One source alleged that Chung, who previously worked with the VC firm New Enterprise Associates, was also fired from NEA. Although that would mean that NEA did not paint a clear picture for TechStars. We've reached out to Chung and will update the post when we hear back.
Here is the portion of the email from Glaros announcing Chung's departure:
I have an important announcement + a general update from TechStars.When TechStars hires new Managing Directors (MD), we make sure there is redundancy in the system, deploying an experienced MD to work alongside a new one. As this is my 6th TechStars program, I've had the opportunity to work alongside Eugene Chung in his first program. This NYC 2013 program shares some common traits with the others; the teams are passionate, driven, executing, and making progress in a short period of time. However as we've come into the home stretch, it has been determined that Eugene is not a good fit for TechStars and as a result, he is no longer employed by TechStars. We wish him the best of luck in his next endeavor.
While I'm not able to discuss the details of this separation, I assure you that his departure is having minimal to no impact on the program as we build toward demo day. I've been working closely with the teams since day 1, I'll continue to do so through the end.
In spite of that distraction, the teams have really congealed as a class and are racing towards demo day. Many have revenue or early interest from customers, and they continue to execute on their products. We're intently focused on fundraising strategies now, and the teams are working on their pitches (they still have a ways to go!), and are circling up with investors that they've met during the program.