LaunchVic terminates deal with 500 Startups for Melbourne accelerator
Thursday, August 10, 2017/
LaunchVic has discontinued its relationship with US-based tech accelerator 500 Startups, following the resignation of 500 Melbourne lead Rachael Neumann.
In July, LaunchVic said it would be putting the 500 Startups project on hold while it waited to see action from the accelerator to improve its culture, including 500 Startups successfully implementing a “remedial plan” to address concerns about a lack of diversity in the company’s culture in light of sexual harassment allegations levelled at it’s then-chief executive Dave McClure.
LaunchVic had set aside more than $2 million from its grant program for 500 Melbourne and McClure travelled to Melbourne in June to officially launch the local operations. Within weeks of the trip, he had resigned from the organisation as a result of the serious allegations of harassment and inappropriate behaviour towards women.
In July, LaunchVic chief executive Kate Cornick said the conversations she had been involved in with 500 Startups chief executive Christine Tsai gave her “hope”, with a successful implementation of the remedial plan required before LaunchVic approved the accelerator’s launch in Melbourne.
However, with Rachael Neumann now stepping down from 500 Melbourne leadership, Cornick said in a statement today she believes the accelerator program can no longer proceed.
“While I am deeply disappointed at how this has ended, I feel confident in LaunchVic’s strong course of action over the past month to give 500 Startups an opportunity
to show leadership to improve culture in the startup sector and fix the issues at hand,” Cornick said in a statement.
“Unfortunately, as we’ve expressed to 500 Startups, that without Rachael Neumann at the helm we don’t believe it will work,” she said.
Cornick said that without trusted local leadership, LaunchVic does not believe that 500 Startups will be able to build the “strong and inclusive culture” necessary for the successful running of the 500 Melbourne program in Victoria.
Speaking to StartupSmart, Neumann says she made the decision to step aside after spending time at 500 Startups’ headquarters in Silicon Valley. She says 500 Startups “has a lot on its plate right now with many competing priorities”.
“After spending time at 500 Startups’ HQ it wasn’t clear that I or the Australian startup ecosystem would be provided with the necessary help to support the local ecosystem,” she says.
“I think just generally when I accepted the role I believed that the program would be able to provide local founders with opportunities to thrive on a global level. On reflection I no longer have the same confidence I had at the start to be able to deliver that successfully,” she adds.
Neumann says LaunchVic had asked her and 500 Startups to develop the remedial plan that would address issues in the organisation, as well as the local program.
“We were absolutely prepared to deliver – that’s not the issue,” she says.
“Looking at competing priorities and whether I would be set up for success — I just determined this was not the right time to do so.”
LaunchVic intends to retain the funds reserved for the 500 Melbourne project and said in a statement that no public funds have been placed at risk as a result of the cancellation of this accelerator program.
Cornick said in the same statement that the funding will be reinvested in another “world-class accelerator program”.
“I’d like to thank the Australian startup ecosystem – many of who have publicly advocated for us and given us the space required to make the right decision,” said Cornick.
Neumann says she personally remains “committed to working on improving the local ecosystem and helping them [local startups] succeed globally”.
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