Startup Accelerator or Startup Killer? Plug and Play Armenia Exposed!

LunarTech has publicly filed a formal complaint against a global accelerator Plug and Play, alleging multiple material breaches of contract, ethical misconduct, and potential misuse of public funds. The complaint asserts that the accelerator engaged in systematic exclusion, deceptive business practices, and an unilateral termination in violation of contractual due process requirements of a participating startup from a government-backed program — an initiative funded with approximately $1 million (EUR 800,000). The allegations raise critical concerns about program administration, regulatory oversight, and Unjust Enrichment and Possible Financial Misappropriation.

This investigative report thoroughly examines the legal ramifications, regulatory obligations, and broader economic impact of these allegations.

Legal Framework: Contractual Obligations and Fiduciary Responsibilities

The accelerator entered into a legally binding agreement with a government ministry, establishing enforceable obligations under contract law. The contractual duties included investor matchmaking, partnership facilitation, and high-value strategic mentorship. Given that the program was publicly funded, the accelerator also had a fiduciary duty to use state funds prudently and transparently for each of the selected 20 startups. A material breach of contract occurs when a party fails to perform a fundamental obligation under an agreement, depriving the other party of expected benefits. If proven, these breaches could constitute actionable claims, exposing the accelerator to civil liability, financial restitution, and disqualification from future public contracts.

Snippet from $1M Grant Proposal of Plug ad Play Armenia

Breach of Contract and Legal Violations

The complaint outlines a pattern of severe contractual violations, including:

1. Failure to Fulfill Program Deliverables — Despite written assurances, the accelerator failed to provide the promised investor introductions, strategic partnerships, and high-quality mentorship.
2. Unilateral and unilateral and wrongful termination in violation of contractual due process requirements — The startup was expelled without due process, violating contractual provisions related to fair dealing and termination procedures after raising the issues caused within the program and being met with no real changes.
3. Fraudulent Inducement and Misrepresentation — The accelerator misrepresented its capabilities and program benefits, leading startups to enter the agreement under false pretenses.

Under common contract law principles, misrepresentation — whether fraudulent, negligent, or innocent — may result in rescission of the contract and potential damages for losses incurred due to reliance on misleading claims and the actions that followed the start of the program.

Potential Financial Mismanagement and Fraud: Legal and Criminal Implications

The complaint requests a forensic audit of the $1 million in public funds allocated to the accelerator. The accelerator allegedly failed to meet Key Performance Indicators (KPIs), despite accessing taxpayer money in case of at least one of the 20 selected startups LunarTech LLC which they interviewed and asked to relocate to Armenia.

The following legal concerns arise:

• Unjust Enrichment — If the accelerator retained government funds without delivering services, it may constitute unjust enrichment, warranting restitution.
• Misappropriation of Public Funds — If funds were diverted for unauthorized purposes, the matter may escalate to criminal fraud under financial regulations governing public procurement.
• Failure to Provide Financial Accountability — As a recipient of taxpayer money, the accelerator had a statutory duty to demonstrate financial transparency. A lack of clear expenditure reports could trigger regulatory sanctions.

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Hostile Work Environment and Discrimination

The complaint describes a toxic mentorship structure, including alleged workplace discrimination, sexism, and retaliation:

• Discriminatory Conduct — a mentor allegedly made sexist and demeaning remarks, questioning a founder’s credibility based on gender rather than merit. He suggested multiple times that the female founder who according to the mentor was “beautiful” will have “hard time to be taken seriously and raise VC capital” as VCs mainly consists of men. Another mentor, who allegedly was also being paid for the follow ups, after being asked why he ignored LunarTechs follow-ups that simply followed the instructions of the mentor and the program leads, asked for introduction to potential customer- called the founder of LunarTech “unprofessional” and “making him feel like he works for her”. Another Mentor who also is a representative of Plug and Play investment team and coach in another Armenian High Tech Ministry program called “Nerouzh”- beside of continuous discouragement and criticism, called LunarTech “Stupid” for not going to San Francisco summit organized by Plug and Play SF itself, which beard significant financial costs for the startups and in fact only 10 out of 20 startups decided to attend it. The program would cover/charge from grant funds the $3000–4000 per participant as a cost per ticket for its own event and all the remaining costs like travel, accommodation and others had to be covered by the startups.
• Failure to Provide Meaningful Mentorship — Despite attending every session, incurring daily waiting time for meeting the mentors, diligently following up with mentors and Plug and Play mentors, the startup received no actionable guidance or networking opportunities. LunarTech has received 0 introduction to potential clients and investors. There were planned pitch sessions organized by the program representatives that LunarTech was not invited to, multiple mentors discouraged LunarTech to fundraise, criticized their product or made demeaning product related remarks without having the knowledge or expertise within the field. Majority of the mentors who had the network to help LunarTech to accelerate didn’t follow up and provide meaningful growth opportunities initially promised by the program, and after reporting this to the program, these mentors came back with opaque explanations or excuses on why they once again can’t introduce LunarTech to anyone or continued to not following up. Excluses included — “You do lot of things, I don’t understand what you do”, “To introduce you to anyone in Saudi Arabia first LunarTech must register itself in Saudi Arabia”, “As we are an accelerator we can’t really help you with grants but only with fundraising”, “I will forward your deck to my colleague but I can’t make any promises”. For 2 months, 20–30 mentors have introduced LunarTech to 0 potential clients and 0 investors nor did the Plug and Play Program itself introduced LunarTech to a single potetal client or investor.
• Exclusion from Industry Events in San Francisco — Startups in the program reportedly and allegedly paid substantial fees to cover the costs to participate in this event but were relegated to low-visibility spaces, didn’t pitch to investors on the main stage like communicated, while other companies (US based program startups) received preferential treatment and pitched on the main stage in front of the audience.

Follow-up Email from The Same Mentor Making the Sexist Comments

Under anti-discrimination laws, organizations receiving public funding are required to uphold workplace equality. If workplace harassment is proven, the accelerator could face civil penalties and potential regulatory investigations.

Unlawful and Premeditated Termination of LunarTech: A Clear Violation of Due Process

The termination of LunarTech from Plug and Play Armenia’s accelerator program was not only unjustified but also premeditated, executed in bad faith, and in violation of fundamental contractual and legal principles. The evidence demonstrates that Plug and Play had already onboarded a replacement startup before even notifying LunarTech of its removal, raising serious concerns about procedural fairness, transparency, and the integrity of the program’s administration.

On January 17 at 16:57, new participant of the Plug and Play Armenia accelerator publicly announced the acceptance into the program, effectively filling LunarTech’s spot before any official notice of termination was provided. Just hours later, at 19:50, Alfredo Gomez, the program manager, directly inquired whether LunarTech would be attending the next session. This deceptive inquiry suggests an attempt to manufacture an excuse for LunarTech’s removal despite the fact that a replacement had already been secured. At no point did LunarTech indicate an intention to withdraw from the program. Instead, it explicitly communicated its willingness to continue, provided that the promised mentorship and support were properly delivered. Despite this, on January 18 at 23:50, Plug and Play issued an abrupt termination email, falsely claiming that the decision was made in LunarTech’s “best interest.” The termination was executed without notice, due process, or any opportunity for remediation, further underscoring the lack of procedural fairness and willful disregard for contractual obligations. The email also cited LunarTech being “too advanced” for the program — an assertion that directly contradicts the program’s stated objectives of supporting high-growth startups and conflicts with the very premise under which LunarTech was invited to join.

LunarTech

This documented sequence of events establishes a clear breach of contract, as Plug and Play failed to adhere to due process provisions outlined in its agreements. It further demonstrates bad faith conduct, evidenced by the fact that a replacement was secured before LunarTech was officially informed. The lack of transparency and opportunity for recourse violates fundamental principles of fairness, while the misleading pretext for termination raises concerns of fraudulent misrepresentation. Plug and Play knowingly induced LunarTech into the program under false pretenses while simultaneously preparing its exclusion, a move that deprived the startup of its rights, wasted its resources, and obstructed its business operations.

The pre-planned nature of this termination, coupled with the Ministry of High-Tech’s failure to intervene, raises significant legal and ethical concerns regarding the administration of publicly funded startup programs. This was not an instance of simple mismanagement but a deliberate and orchestrated exclusion. Such conduct not only undermines the credibility of Plug and Play but also calls into question the government’s oversight and responsibility in ensuring that public funds are allocated to programs that operate with transparency, accountability, and integrity.

Gross Negligence, Willful Disregard, and Regulatory Failures

Throughout the duration of the Startup Catalyst Program, LunarTech consistently utilized the weekly mentor review process to report incompetence, discouragement, and unprofessional treatment. In addition to these formal reviews, multiple written complaints were submitted via emails and text messages, and verbal reports were made directly to various representatives of Plug and Play and the Ministry of High-Tech. These complaints documented multiple failures, unethical conduct, unfulfilled contractual obligations, and the overall failure to provide meaningful support to participating startups.

These issues were explicitly reported to the leadership of Plug and Play Armenia, as well as senior government officials, including the Deputy Minister of High-Tech. Despite these warnings, neither entity took real corrective action to address the failures or prevent this behavior. Instead, Plug and Play responses were consistently dismissive and inadequate. Representatives either offered empty apologies, justified inappropriate behavior by describing mentors as “passionate,” or repeatedly made excuses with no corrective actions that made a difference in LunarTechs experience in the program. Whenever concerns about the program’s effectiveness or the lack of impact were raised, their response followed the same pattern — deflections, follow-up promises, and justifications — all leading to zero action and zero meaningful impact for LunarTech.

LunarTech founder and CEO had relocated its operations to Armenia based on the Ministry’s and Plug and Play representations regarding the program’s value and condition of physical presence. However, at the end of the second month, after repeated incidents of discouragement, unprofessionalism, and failure to provide promised deliverables, LunarTech formally warned both Plug and Play and the Ministry of High-Tech that it would be forced to step out of the program if these issues were not immediately addressed.

Instead of taking corrective action, Plug and Play escalated this misconduct by continuing the same behavior and, before even notifying LunarTech, had already selected a replacement startup. This premeditated replacement demonstrates bad faith, willful disregard for contractual obligations, and a deliberate attempt to exclude LunarTech without due process.

This negligence constitutes a fundamental breach of both fiduciary and contractual obligations. Plug and Play, as the program’s administrator, had a duty to ensure that mentors provided meaningful guidance and that startups received the promised support, networking opportunities, and investment access. Similarly, the Ministry of High-Tech, as the funding entity, had a responsibility to oversee compliance, enforce program standards, and take action when clear evidence of misconduct was presented. Both failed in these obligations.

Moreover, programs continued failure to act despite repeated reports and explicit warnings might amount to constructive fraud. Plug and Play knowingly misrepresented the program as a fair, equitable, and results-driven initiative while allowing a dysfunctional and exclusionary environment to persist.

Plug and Play’s failure to uphold professional standards, provide the promised program benefits, or intervene when clear reports of misconduct were presented also resulted in psychological distress for LunarTech’s founders, particularly Tatev Aslanyan. The dismissive treatment, repeated discouragement, and refusal to act despite knowledge of the harm caused constitute negligent infliction of emotional distress and a breach of the duty of care expected in a professional and government-funded setting.

Given that Plug and Play was entrusted with state funds to facilitate startup growth and investment opportunities, its failure to meet contractual deliverables while engaging in negligent and exclusionary conduct raises serious concerns about the misuse of public resources. Plug and Play Armenia must be held accountable for their failure to protect participants, enforce program standards, and uphold legal obligations under contract, anti-discrimination laws, and public procurement regulations.

LunarTech Enterprises | LunarTech Academy | Phoenix

About LunarTech

LunarTech has rapidly established itself as a formidable force in the technology sector through a relentless focus on delivering impact. Despite operating with a lean team of two founders, we have successfully built and deployed over 100 programs, reaching more than 50,000 professionals and influencing an audience exceeding 50 million individuals in 144+ countries. Our comprehensive portfolio spans software development, AI-focused bootcamps, deep learning, machine learning, and specialized courses in data science — each designed to address real-world industry needs.

Our partnerships serve as a testament to our credibility and effectiveness. Collaborations with Microsoft, Nvidia, Google, OpenAI, and Anthropic enable us to align with the highest standards of innovation, giving our learners and clients exposure to cutting-edge technologies. Our open-sourced content, coupled with strategic alliances with organizations like freeCodeCamp, demonstrates our unwavering commitment to accessibility. These initiatives eliminate cost barriers and help cultivate the next generation of skilled professionals, extending our influence beyond traditional corporate boundaries.

What sets LunarTech apart is our rigorous and methodical approach. Both founders bring academic and professional experience from leading universities and global tech firms, ensuring that our offerings balance theoretical excellence with practical application. We prioritize durability and scalability in our programs, aiming for solutions that hold up in fast-changing markets. Our track record — ranging from app development to advanced AI systems — reflects a consistent emphasis on quality control, knowledge sharing, and measurable outcomes.

Our results speak for themselves, and any dissenting views typically lack substance or stem from competitors who find our progress disruptive. We welcome constructive dialogue aimed at bettering our solutions and strengthening our community, but we remain aware that attempts to undermine our credibility often point to malice rather than genuine critique. With every new project, collaboration, or product launch, we demonstrate not just our technical capabilities, but also our unshakable determination to excel.

Looking ahead, LunarTech remains focused on scaling our impact while maintaining our standards of excellence. We encourage professionals, organizations, and independent learners to leverage our resources and join our open-source community. Our consistent growth in a relatively short span underscores our capacity to adapt, innovate, and thrive — qualities that position us as a resilient and forward-looking player in the global tech landscape.

Snippet from $1M Grant Proposal of Plug and Play Armenian

Plug and Play: The “Too Advanced” Paradox

Plug and Play proudly proclaims itself as the “#1 most active Venture Capital of the World” with “the most successful startup exits in 2023.” The organization touts a presence in 60+ global locations, the acceleration of 2,700 startups, partnerships with over 650 large corporations, collaborations with 300+ leading VC firms, and a network of more than 30 unicorns. It also partners with numerous governments — ranging from local initiatives to entities like NATO-affiliated accelerators — stressing its self-declared capacity to serve startups at every stage. Founded in 2006, it has reportedly evolved into a global innovation powerhouse, citing high-profile alumni and widespread influence. By all outward appearances, Plug and Play would be the perfect match for any venture — especially a deep-tech AI startup operating at the forefront of innovation.

Yet in LunarTech’s case, this lofty reputation collided with an unexpectedly candid dismissal: “You’re too advanced.” One might liken this to the overused breakup line, “It’s not you, it’s me” — but in an accelerator context, it reads more like: “We’re the biggest player in the world… until you walk through the door.” This contradiction is hard to ignore, given the breadth and depth of resources Plug and Play claims to command. If the self-styled “most active VC” truly has the scope to manage startups from seed stage to unicorn status, one would reasonably expect that “too advanced” wouldn’t even be in its vocabulary.

This glaring discrepancy points to a potential gap between Plug and Play’s well-promoted narrative and its tangible execution. A venture that was openly praised for its robust technical foundation was — by the accelerator’s own words — ill-suited for a program purportedly designed to accommodate high-potential startups. First LunarTech was not advanced enough then LunarTech was suddenly too advanced for this “acceleration program”. For an organization boasting a worldwide network and success stories in nearly every industry, it is perplexing that its staff couldn’t adapt or leverage these expansive ties on behalf of an advanced AI company. If a startup is deemed “too advanced,” perhaps the accelerator’s real competencies are narrower than advertised, raising pertinent questions about whether any company that operates outside a neat, conventional box can truly benefit.

In many jurisdictions, presenting oneself as possessing extensive capabilities in order to secure a government-backed contract, only to selectively withhold resources or deny meaningful participation, can constitute fraudulent misrepresentation. Procuring a public tender or government partnership through false or inflated claims falls under various anti-fraud statutes. For instance, it is widely recognized that any entity making “knowing and material misrepresentations” to gain public funds or official endorsements may be in violation of laws aimed at preventing false claims against the state. Moreover, selectively providing or withholding the very services promised in a publicly funded initiative could expose an organization to charges of improper administration of government resources. In such cases, the principle of unjust enrichment often applies, where a contracting entity improperly benefits from public funds without delivering the agreed-upon outcomes.

These conflicting messages go beyond marketing puffery. They underscore a deeper issue: the potential disconnect between what Plug and Play presents to governments, investors, and founders versus how it actually performs. If the accelerator is truly operating on taxpayer money for certain programs, any perceived misrepresentation, selective allocation of services, or exclusion of “advanced” startups would implicate not just contractual breaches but also possible violations of public procurement regulations. The “#1 VC” label and claims of unmatched global reach are highly persuasive in winning government partnerships, but if the reality is that high-potential startups are turned away for being “too advanced,” then accountability — and potentially legal scrutiny — becomes unavoidable.

Legal Consequences and Regulatory Violations

The complaint outlines multiple legal violations, including:

1. Breach of Contract — The accelerator’s non-compliance with KPIs constitutes a material breach.
2. Breach of Good Faith and Fair Dealing — The unexplained termination of a startup while onboarding a replacement suggests bad faith.
3. Negligence and Duty of Care Violations — The failure to deliver professional mentorship and networking opportunities, despite government funding, constitutes gross professional negligence.
4. Fraudulent Misrepresentation — False advertising regarding capabilities may violate consumer protection laws.
5. Hostile Work Environment and Workplace Retaliation — If proven, these allegations could lead to civil rights claims.
6. Unjust Enrichment and Potential Financial Fraud — The absence of measurable program benefits despite public funding suggests possible misuse of state resources.
7. Psychological Harm and Workplace Coercion — The intimidation of startup founders, leading to financial and professional distress, could trigger legal claims for damages.

LunarTech

Conclusion: Breach of Trust and the Undermining of Armenia’s Startup Ecosystem

This program was designed to strengthen Armenia’s startup ecosystem by fostering collaboration, innovation, and support. Instead, it has done the opposite — creating division, exclusion, and failure. Rather than helping startups grow, it misled, discouraged, and ultimately harmed them. The Armenian government actively promotes diaspora engagement, encouraging Armenians to return, invest, and contribute to the country’s development. LunarTech answered this call in good faith, fully relocating its operations to Armenia with the expectation of a fair, transparent, and results-driven program. LunarTech proactively collaborated, engaged, and contributed to the program for 2 months, doing everything in its power to succeed. Yet instead of receiving the promised support, it faced setbacks, negligence, discouragement, and even outright sabotage — the exact opposite of what was committed.

LunarTech is not just another startup — it is a deep-tech AI company operating in one of the world’s most high-impact industries, providing AI education and cutting-edge innovation. Its founders are Armenian AI engineers from the diaspora, leading a U.S.-based startup with global expertise and the ability to drive meaningful technological advancement that could directly benefit Armenia’s economy and society. Yet, rather than being supported and empowered, they have been systematically sidelined, obstructed, and excluded, while the Ministry of High-Tech stands by in silence.This raises a critical question: Why is a high-potential Armenian deep-tech startup treated this way under a government-backed program?

‍ If the Ministry of High-Tech Armenia is truly committed to fostering a thriving, innovative ecosystem and truly wants armneina tech ntrpreneurs return home and innovate here, then it must enforce transparency, accountability, and genuine support for startups. How can Armenian entrepreneurs and professionals worldwide trust the government’s invitation to relocate and invest in Armenia when the very programs meant to support them actively push them away?

How can a government-funded acceleration program, under direct supervision of the Ministry, justify misconduct, contractual violations, and deliberate harm to a startup — dismissing it with the excuse of being ‘too advanced’ while wasting its time and resources? What message does this send to other global innovators considering Armenia as a base for their ventures? If they come to Armenia and they are “too advanced” they will be dismissed and sabotaged while Ministers will take this as “Feedback”. When unethical and harmful behavior is tolerated, negligence turns into implicit endorsement, fostering an environment where misconduct is normalized. This failure to act sends a clear message that such behavior is not only accepted but encouraged — ultimately making the Ministry of High-Tech complicit in sustaining a system that undermines the very ecosystem it claims to support.

Does the Armenian government truly seek to build a competitive and innovative startup ecosystem, or is its public message entirely disconnected from its actions? If the Ministry of High-Tech is serious about fostering an environment free from nepotism, monopolies, and systemic failures, it must ensure strict oversight, transparency, and meaningful accountability. Advanced startups should be even more supported not discouraged or sabotaged. Otherwise, it will continue to drive away the very real talent, investment, and innovation Armenia needs most.

The Armenian government and the Ministry of High-Tech now face a defining choice: either enforce transparency and accountability, or allow this accelerator to continue unchecked, reinforcing a culture of impunity. If these allegations are substantiated, it will not only severely damage the accelerator’s credibility in global markets and future public-private partnerships — it will also raise serious questions about the Ministry’s integrity should it continue to fund this initiative without a full and independent investigation.