Back in August, Fast Company reported that Facebook cofounder Chris Hughes had sold his startup Jumo, a social network to connect people to nonprofits, to GOOD, the magazine publisher and digital media platform, for undisclosed terms.
Betabeat reported the terms were for $0 and a graceful exit.
Our story said Mr. Hughes’s company was a flop, and that the sale was more of a face-saving effort than a true acquisition. “Rather than folding the grant-funded, well-meaning and inordinately high-profile startup and admitting what would surely be a very public failure, he arranged a deal with an old friend,” we wrote at the time. Ben Goldhirsh, who went to boarding school with Mr. Hughes, is the CEO and owner of GOOD.
Betabeat has now obtained documents pertaining to the sale, which confirm every bit of our theory, except one. At the time, Mr. Hughes insisted the sale price was not $0, and he was right: The sale had not yet been approved by the state attorney general, a requirement because of its nonprofit status.
The sale was approved and the approval was filed in the Supreme Court of New York on December 30, 2011.
Jumo, a nonprofit corporation which raised more than $3.5 million in grant money from the Ford Foundation, the Omidyar Network and the Knight Foundation., among others, was not sold for $0. It was sold for $62,221, based on an appraisal of Jumo’s value by Morrison, Brown, Argiz and Farra.
Time and the documents have shown that public statements made by Mr. Goldhirsh and Mr. Hughes were disingenuous. The “Jumo team will be fully integrated into the GOOD ecosystem” or that Mr. Hughes would be working on “Jumo’s next act… will appear under the GOOD imprimatur in some form this November or December” have both proved false. We could find only one employee who had been hired at GOOD after Jumo: Jen Chiou, Jumo’s former outreach director. Ms. Chiou is now general manager at GOOD Worldwide, LLC; other Jumo employees went to Tumblr, Artsy, BlackBook Media and other places. Jumo did not immediately respond to a request for comment.
(Additional fun fact: Jumo paid pretty well! Ms. Chiou made $95,000, the CTO made $150,000, and the engineers made between $107,500 and $135,000; Mr. Hughes, as executive director, took a $1 salary.)
Furthermore, while Mr. Hughes was supposedly slated to be a senior advisor to GOOD, we heard nothing about it after the announcement. The Facebook cofounder, whose second act included working on digital strategy for Barack Obama’s presidential campaign, has gone on to join the Knight Foundation board, some kind of agency for the viral spread of progressive ideas with MoveOn veterans, and, most recently, take over as publisher and editor-in-chief of The New Republic.
Here is what GOOD did get from Jumo:
(a) 1-year exclusive license to use the Corporation’s trademarks, copyrights, and brand likeness and the goodwill of the business associated therewith;
(b) a minimum of 10 registered users communications;
(c) a secure API endpoint for the retrieval of the Jumo profile and social graph information based on an email address (personal information to be transferred only if the user opts in to the transfer pursuant to the process described in paragraphs 11 and 12 below); and
(d) facilitation of Purchaser’s recruitment of Seller employees.
Jumo also agreed to hand over five MacBook Pros, according to documents.
According to the document, which was filed in December, Jumo was also working to return approximately $488,944 in unused grant funds to The Ford Foundation, Knight Foundation, Omidyar Network, Pershing Square Foundation, and Rockefeller Foundation, in accordance with written grant agreements. No debt was transferred in the “sale,” but GOOD didn’t even get Jumo’s domain name or its two patents.
The document filed with the New York Supreme Court:
Ben Weitzenkorn contributed reporting.