Monday, October 14, 2013

Newark Mayor and NJ Senate Candidate Cory Booker Unloads Floundering Waywire Startup Ahead of Election

A video-sharing site affiliated with social-media savvy Newark, NJ mayor Cory Booker was sold to cloud video provider just days before a special election in which Booker is running for the US Senate seat left vacant after the death of Democrat Senator Frank Lautenburg.

People familiar with the transaction say that Magnify, which helps websites manage, curate and distribute video, is buying Waywire primarily with equity.

It’s unlikely that the deal placed a high value on Waywire, which had previously raised $1.75 million
Booker announced that he would give the proceeds of his share of the sale to charity once the transaction was completed.

Waywire was started by Booker and former Yahoo [NASDAQ- YHOO] executive Sarah Ross in April of this year. The startup received a substantial cash infusion from Booker's wealthy supporters including Oprah Winfrey and Google [NASDAQ- GOOG] executive Eric Schmidt. Perplexingly, Booker stated a number of times that he "had YouTube in his sights", despite receiving startup money from the video platform's parent company, Google.

That wasn't the only thing about Booker's Waywire that was off- the 15 year old son of CNN President Jeff Zucker was on Waywire's payroll as an adviser before stepping down once new of his involvement was made public.

After somehow scoring a seat on the advisory board of the rising Democratic star’s Waywire video-sharing site, 15-year-old Andrew Zucker abruptly quit yesterday amid questions over his qualifications.

The rich kid’s consulting career as a “millennial adviser” ended just hours after it was revealed that he had been granted stock options in the firm co-founded by Booker, the Newark mayor who polls show is a shoo-in for the US Senate after a special election.
“Despite the fact that his affiliation with Waywire was extremely limited to only an advisory capacity, in order to avoid even the perception of a conflict, Jeff’s son has resigned from the Waywire advisory board, effective immediately,” CNN said in a statement.
News of Andrew’s stock deal lit up social media yesterday, with critics on Twitter branding it a “gross nepotism alert.”
Corporate-governance experts also called his hiring highly unusual, saying they’d never before heard of anyone so young getting such a cushy gig.

Advisory boards are usually stocked with “seasoned folks who have been through the process of making that kind of a start-up work, or enhancing the capacity of a company so it can move to an IPO [initial public offering] or the next level of business,” said Eleanor Bloxham, CEO of The Value Alliance. “So you’re not generally looking in the high-school age range.”

The funding from wealthy donors for a startup with a poorly defined purpose and appointing the teenage sons of network CEOs to lucrative positions has led to accusations that Booker was looking to enrich himself or sell access in anticipation of winning the Senate seat while former employees say that Booker and others in the company were simply looking to keep it afloat until after the election to stave off a potentially embarrassing and politically damaging bankruptcy.

Although Booker's poll numbers have been slipping before this month's special election, the Newark mayor still enjoys a sizeable lead over Republican challenger and former Bogota, NJ mayor Steve Lonegan.

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