“The court has since ordered the company to auction off the warrants it held in more than 1,000 of the startups that went through the accelerator program.”
Newchip charged founders up to $20,000 for its training program and also took the right to buy $250,000 of their shares later. Then it went bankrupt, and the court is selling those warrants to whoever bids. Founders get no say in who lands on their cap table. Lacey Hunter lost a bank grant over an unknown warrant holder and shut her company. Founders paid Newchip to help them grow, and Newchip’s creditors are the ones cashing in.