Newchip Accelerator Bait-and-switch Exposed

I reached out to Ryan Rafols before publishing this article, and he offered to speak on the phone, but did not respond to questions via email. If he does respond in writing, I will update this article with his reply (or he can comment below).

Hucksters can exclusively reveal a large part of the illegal email spam and fraudulent bait-and-switch scheme run by Newchip, a “veteran owned” company based in Austin, Texas, that claims to be a “venture capital” firm offering funding to small businesses — but is in fact primarily focused on selling on online “accelerator” course to young entrepreneurs — along with “leadgen” spamming services.

The company, founded and managed by Ryan Rafols (who recently started going by “Andrew Ryan”), was started back in 2016 with a focus on institutional brokerage services (they’ve been slowly rebranding to Astralabs, which is how they are currently listed in the SEC directory) but has been getting more attention in the last few years due to their incredible amount of spam they generate for their latest project, Newchip Accelerator.

Ryan Rafols The Christian Conman?

Rafols served in the U.S. Army from 2008-2012, after which he attended University of Texas (Austin) and majored in political science, while participating in the fraternity Delta Kappa Epsilon. While the few years immediately after that are murkey, eventually Rafols looks to have launched a brief consulting business with his gal pal from China, Gege Grace, called R2G2 that offered Christianity-inspired business advice, despite his only apparent management experience having been volunteering in the University Area Partners neighborhood association in Austin.

It’s around the same time, 2016, that Rafols claims on various online profiles to have “co-founded” Safer Technologies (a tracking app for first responders that was previously called Campus Watch), before launching Equity Genesis which would become a precursor to his later companies, Newchip and Sofos (which are now all rebranding to ASTRALABS after merging with a third-party company called Journey Venture Partners). In fact, the only reason that Newchip/Astralabs registered with the SEC appears to be because Rafols planned on offering stock broker services, and not because they have any significant private equity funding operation, which usually triggers federal attention. For the record, there was never any corporation entity registered with the name “R2G2” or “Equity Genesis” in the State of Texas.

Now, if you’re wondering how an Army veteran shifts from graduating college, to being a business advisor, to becoming a stock broker, to becoming an expert on tech startups and venture capital funding over the course of just a few years, you’re not alone. After all, despite Rafols repeatedly claiming on social media and various podcasts that he started his first company “at 17 years old” and has founded and sold 4 different companies, the only public information about his business dealings we could find — going all the way back to 1999 — were these R2G2 and Equity Genesis brands that he briefly ran after college, but never incorporated and do not seem to have lasted more than several months. Literally, that’s it, unless he considers changing the name of his Equity Genesis company 4 times to justify marketing himself as a “4x founder”  — or unless he’s talking about that one time in high school when he resold energy drinks to his friends.

But what about Safer Technologies? Ryan claims to have launched a “top 100 mobile app” in reference to that brand.

Well, those few other companies that Rafols has tried to attach himself too appear to be run by other people entirely. For example, both Rafols and Grace claim in various online profiles to be “co-founders” of the Campus Watch app (now called Safer Technologies), but current executives there say it’s totally bogus. Reached via email, a Safer Tech exec, who asked to remain anonymous, confirmed, “[Rafols] was never any part of Safer Tech, and in the early days relinquished his role as a “cofounder” at Campus Watch years ago — prior to any investment, or MVP, and holds zero interest or position with either company… [Rafols and Grace] were co-founders [for about a month] but he did not “exit”… we bought his [Campus Watch] shares and hers out due to internal conflict.”

In other words, Rafols had zero involvement with growing the Safer Tech company, developing the mobile app, or selling the company to Avast, the current parent company.

Rafols also previously claimed to be the CEO of Workspace on an older Linkedin profile (scraped by Datanyze) by again, that appears to be completely fabricated. We are in touch with employees at that company, and will update this article if we hear back.

Sofos owned by Ryan, spun out of Traction Academy program under Newchip

https://99designs.com/logo-design/contests/design-logo-cthulhu-would-be-proud-bring-kraken-1099463

Journey Venture Partners

He also has repeatedly referred to himself as a “missile defense engineer” during his time in the Army, but such a title/position doesn’t even exist; an older ZoomInfo profile reveals that he was in fact an enlisted solder, and a “tactical assistant” (most likely Tactical Director Assistant a.k.a. TDA), which is merely a prerequisite to being an AMD Systems Tactician (140K), a position that he doesn’t appear to have achieved. Surely, most Americans who join the military deserve some level of respect, but inflating your military resume to sound like some type of rocket science engineer is shameful and absurd, especially when the only degree you hold is in political science, and you have no engineering experience.

But if Rafols never actually launched a tech startup before, and his only other significant experience was volunteering for the City of Austin and a neighbord association, where in the hell does he get off claiming to be a VC and startup expert? And therein lies the problem of Newchip.

The Newchip (Astralabs) Bait-and-Switch

While the last several years has seen email spam reach incredible new levels — as the industry rebrands to being called “lead generation” — some players like Newchip have taken the crime to a whole new level of fraud by targeting businesses looking for financial investments.

How the scam works is that Newchip brings on professional email spammers like Anthony Garibay (who also runs a fake investment firm called Garibay Ventures), who then illlegaly spam thousands and thousands of website owners, offering them “venture capital” and/or “investment” for their business. Like so many American spammers, this approach directly violates not only the CAN SPAM ACT of 2003, but likely an array of other consumer protection and anti-fraud laws and regulations… and yet, such crimes are rarely prosecuted in the U.S. until they garner enough public attention and/or reach a level where federal agents finally decide to get involved.

Here’s an example email Newchip partners send out:

Hi! I am the founder of Garibay Ventures an investment firm based out of Austin, TX. I focus on investing and providing companies with the highest lead generation opportunities while a maintaining the best cost effective strategies. Have worked with multiple Fortune 500 companies including Mark Cuban directly for 6 years. Feel free to reach out to me chat!

I saw your company on LinkedIn and thought it would be great to connect! Seems very exciting what you’re working on and I’d like to connect to see if we are fit for an investment in your company.

My fund Garibay Ventures recently came off a raise and we are evaluating investments for the upcoming QT.

I’ve recently partnered with Newchip’s accelerator to help dig a little deeper into companies with our scout team while also offering the chance to get extra exposure to their investors(which I am apart of).

I’d like to talk to you about your fundraising goals. If you have some time to chat soon let me know and if you don’t mind prior to a call filling out this application so I can learn more about you/your company(save us both a ton of time)

https://launch.newchip.com/apply-now/ .

Ping me if you put an application in so I can have it forwarded to my team.

Thanks!

Anthony Garibay
CEO/Founder, Garibay Ventures

What Anthony and the other marketing channels (social media, etc) fail to explain to business owners is that Newchip is not actually a venture capital firm, nor does their company have even one single employee that qualifies as a financial investor as defined by the SEC, despite all of their marketing materials claiming to be “investors” looking to “invest” in the businesses that they reach out to… in other words, the entire thing is fraudulent.

We were also able to goad Matthew Bell (who ironically uses the handle @sellout217) into aggressively defending the Newchip scam on Reddit, where he runs an account promoting various NFTs and related “investment” oriented services. Of course, his relationship with Newchip is even more questionable since he writes illegal glowing reviews of their program without disclosing the fact that he is a business partner of Newchip (he claimed anonymously on Reddit that Newchip connects him with investment opportunities, oops!), or the fact that his brother Samuel Bell is in charge of Newchip’s “Partnership program” — a fancy name for affiliate marketing email spam program.

It gets worse.

According to an anonymous participant of the Newchip Accelerator program, their so-called “Pitch Week” which they market as your opportunity to pitch your startup to investors, in fact doesn’t even happen. He explains:

• Each company has an Advisor assigned to help you through the syllabus. I am going to use names because this is factual information. Our advisor was Shane and he was supposed to meet with us each month. Shane was AT LEAST 2 weeks delayed in simply answering emails and we are four months into the program and have had exactly 1 ten minute call. this is despite repeated requests for help.
• Each Company is supposed to have a mentor assigned after a certain milestone is reached. Our company mentor was assigned two months after the deadline for mentor assignment and even then he is terrible. Our mentor doesn’t answer emails or accept calls. We are supposed to meet once a month for 60 minutes and we have met one time for 25 minutes after 4 months in the program.
• There is no escalation ability, you literally can not contact anyone or get anyone’s email address neither through the webpage or the program syllabus. so when you run into issues with your advisor like we have had there is no way to find a solution.

• The “Pitch week” is a disappointing. You don’t actually pitch anyone, you record your pitch and they claim to show it to investors. There is no Q/A, no interpersonal interaction, no networking. You simply accept that they showed it to their “Massive” investor network.
• Probably the worst part is there is an undertone of unprofessionalism. From the first introduction, when the founder of the company is eating cheetos and expounding on our requirement to be our best, to the utter lack of communication and ability to seek help, it is obvious that once the sale is made the existing client is secondary to the prospective new client.

But Newchip doesn’t only scam young entrepeneurs — they also scam people looking for a job.

Another person who applied for a job at Newchip claims that after applying for an open position, Newchip “accepted” him into their team but asked him to work for free, saying “Newchip Accelerator does a bait and switch on its job applicants. After you apply for a job online, they ask volunteer for their company before they will consider you for a job application. The job application is just a front for them to recruit people to voluntarily work without pay for them.” Which, if true, is consumer fraud, and highly illegal behavior.

Any of these experiences on their own might be considered unreliable, but added together they show a pattern:

• “I have seen too many employees hired and fired with no regard. Management will let you go without as much as a warning. So much so that they wont even give employees their benefits till after 90 days.”
• “I saw people getting fired no reason and without even a single warning. You should decide whether you can join such an unstable job or your future lies elsewhere.”
• “I got called by someone who introduced themselves as the hiring manager. It was really weird that he wanted to have a face to face interview for the first chat. None of the tech companies I’ve interviewed with will operate like that. Since I live out of town, I asked if there was any way we could do a phone call to make sure we were on the same page before I drove 3h each way, and he literally laughed at me. When I got to the location, the interview lasted 30min. I felt that the people interviewing me were quite junior for the roles that they had, and I didn’t feel that the questions they asked were even reflective of the skills for the job I would be doing. I flat out asked the person interviewing me if there was any concerns in my personality or skill-set that I could help alleviate because I thought I was a good fit for the role, and he said no. I followed up a week later and now it’s been almost 45 days and I haven’t heard anything. Not even a deny.”
• “I received an email asking me to complete a 6-hour assessment within three days. Newchip seemed like a company I would like to work for and since I had no time in my schedule, I stayed up all night working on it. I figured most people would ask for an extension, so I decided I would get it done to prove how important the opportunity was to me. Four months have passed and after reaching out multiple times, I have not heard back from anyone. I have never written a review of anything in my life but I think it’s important people know what they are getting into before they waste so much time filling out an assessment. Only apply to Newchip if you are dead set on working for them. If not, don’t waste your time because if you don’t get the job, they won’t even have the decency to tell you.”
• “Because the leadership team as in complete disarray and there were a lot of unfixed issues, this place would definitely go downhill. It’s only a matter of time before they lose everything – people, clients, and prospects.”
• “Management in complete disarray and self-absorbed. CEO, Ryan Rafols is the worst, pretending to care about the customers and employees but actually only cares about the bottom line. If you’re really desperate for a job and get an offer, take it.”
• “I worked at this company prior to the pandemic and had a terrible experience. Poor company culture. They don’t value their people. Compensation and benefits were under market value. Leadership would say one thing and then would do something completely different. Do yourself a favor and do not consider working at this company.”
• -Virtually all my former coworkers have quit or been let go. I have never worked for a company that has experienced almost 100% turnover in less than a year (which is a major red flag, Strike 1). There is no one on the current Newchip team who has been there for more than a year. All the original co-founders have left except for Ryan Rafols, the current CEO.-CEO Ryan Rafols is not a leader. Period. He talks a big game but has nothing to show for it. Think a 27 year-old Donald Trump. In my entire time at Newchip, not once have I seen him accept personal responsibility for a failure or setback. Instead, he always shifted the blame to others. He makes frequent derogatory remarks and gossips about current and former coworkers like an adolescent. Over the past year, I witnessed many acts that clearly cross professional and ethical boundaries. Here are a few examples:-Calling out and publicly humiliating an employee on the company Slack.
  -Threatening termination or reduced wages to coerce employees to work longer hours.
  -Showing clips from ‘The Wolf of Wall Street’ to train sales. (Con artists imitate other con artists…)
  -Texting teammates at very late hours.
  -Asking a new female employee on her first day to go over to his house to feed his cat, which clearly made her feel very uncomfortable.I can go on but there’s too many to list. Ryan’s unprofessional, unethical, if not outright illegal, behavior (which can be attested to by many other ex-employees if this ever ends up in court) is embedded into the everyday work environment at Newchip and is the main source of the company’s dysfunction.No company with a functioning HR department (Newchip does not have one presently, nor should you expect it to have one in the future) would tolerate such a person on their team, let alone executive leadership. Newchip’s current CEO is a b-school case study of what a CEO should not be or do.-The company has no board of directors, legal counsel, compliance, or HR department that can control Ryan Rafols or provide any kind of check and balance. Another red flag, Strike 2. As a result, Ryan makes many decisions arbitrarily without any kind of input, with consequences that fall on rank-and-file employees who are not told until last minute (if at all) or consulted in any way. Processes are not followed, let alone get documented because of Ryan’s erratic behavior, top-down micromanagement, and arbitrary actions without reference to data or careful deliberation with teammates.-The company is drowning in debt. Management will not be honest about its financial state or take basic actions to avoid unnecessary spending ($400 headphones?! Seriously!?). At one point, the company tried to brand itself as an “incubator” and lease out extra rooms (that business model, “Newchip Labs,” failed miserably) to make some extra money out of desperation. In addition, management couldn’t make payroll on time on multiple occasions despite employees being paid way below market rate. Final red flag, Strike 3 and you’re out.-The company’s accelerator business model is all smoke and mirrors.i. The “fund” exists in name only. If you think you’ll be introduced to real VCs at Sequoia Capital, Andreessen Horowitz, or Founders Fund, you are gravely mistaken and being conned.ii. Anyone applying to the accelerator should question the credentials of the management team. As far as I’m aware, no one on the team, including Ryan, has worked at an investment bank, big law, or venture capital firm on Wall Street or Silicon Valley. No one has held a C-level position or was a department head in the past at a Fortune 500 company. No one, including Ryan, has had a multimillion dollar exit.“Venture Associates” are college students or recent grads with no VC or professional finance background. “Venture Associates” are essentially salesmen. They read from a script and pressured to use hardball sales tactics to lure in and collect fees from gullible, desperate founders who think they are applying to a world-class, exclusive accelerator (it’s not). They are given impossible sales quotas with little to no training. If you ever interacted with Newchip, don’t be surprised to be speaking to many different young faces within short periods. The turnover among “Venture Associates” is massive. Of course, Ryan can replace them endlessly with desperate young people eager for a job, any job.iii. Ryan uses automated emails and LinkedIn messages to mass-spam founders and entrepreneurs as lead generation for the accelerator. That’s Newchip’s “marketing department”: Ryan and all his various spam accounts. At one point, he made interns to reply to his many messages (using templated canned responses of course) in his multiple inboxes from founders who are smart enough to ask basic due diligence questions.-Hiring/firing is the most unprofessional and irresponsible I’ve ever witnessed in any organization. Loyal, hardworking employees are dismissed without a performance review or a severance package the minute they no longer serve Ryan’s purposes or start pushing back on his behavior. The callousness in how he throws teammates under the bus is utterly appalling.On the other hand, new staff are brought in at random intervals and without proper vetting by current employees. Again, Ryan makes these hiring/firing decisions arbitrarily.

  The near 100% turnover alone will prevent Newchip from ever developing a sustainable culture, let alone become a legitimate company with a real product and mature leadership. As Peter Thiel wrote in ‘Zero to One,’ “A startup messed up at its foundation cannot be fixed.” Newchip is a living example.

  Warning to current Newchip employees: Ryan sees you as disposable. You will almost certainly receive the same cruel treatment if you haven’t already.

  In my entire work experience, I have never spoken ill of a former employer on any public forum. Out of sadness and deep regret, I am forced to make an exception. My experience at Newchip was so overwhelming that I feel obligated to speak out as a public service announcement to warn potential business partners and future job applicants.

In Newchip’s defense, there are over 100+ reviews on Glassdoor, and many of them are positive, esp. in the past 6 months. But it appears that perhaps Ryan is having many of his “students” or other people who participated in his various coaching programs to leave reviews as if they were employees, when they’re not. The parent company, ASTRALABS, only has 28 employees listed on LinkedIn at the time of writing this, so there is something strange going on with the Glassdoor reviews.

Lies, Threats, Bullying, and Jesus

As it stands, it appears that Newchip relies heavily on bullying participates into accepting their broken promises (and hoping they are too embarassed to sue?), and aggressively attacking anyone online who questions or criticizes their tactics. In the past few weeks alone, I have seen them successfully delete several Reddit pages from the Google index by contacting Reddit employees and community moderators. Ryan Rafols has also stopped by Hucksters, and posted on Reddit, to slander me with false claims like I was rejected from their program, and that I’ve been criticizing Newchip “for years” when in fact I only found out about their scam a few months ago when Anthony Garibay began spamming me.

I’m not sure which Bible that Ryan reads, but apparently his form of Christian business mentorship comes from an alternative universe where Jesus Christ scams people and steals their hard-earned money while engaging in self-worship on social media. When his latest scheme inevitably falls apart, he may have a promising future as a televangelist for a Texas megachurch…