Booker to End Association With Start-Up He Founded

Mr. Booker’s association with the Internet firm, Waywire, had become an embarrassment for him even as he seems poised to capture the Senate seat in a special election next month.

Critics in both parties sharply questioned the prominent role he had played in forming the company, even while he was the full-time mayor of the state’s largest city — and one of its poorest.

Mr. Booker personally helped obtain money from influential investors — including Oprah Winfrey and Eric E. Schmidt, Google’s executive chairman — and tapped the expertise of technology moguls and entrepreneurs in Silicon Valley.

At one point, the firm became tabloid fodder when Andrew Zucker, the 15-year-old son of Jeff Zucker, president of CNN, resigned from a board that advised Waywire, a site whose goal includes making it easier to collect, curate and share videos from the Web.

In a statement, Mr. Booker’s campaign said on Friday that the mayor would be stepping down from Waywire’s board and donating his ownership interest in the company to charity. Mr. Booker, in a financial disclosure statement filed with the Senate, estimated that his interest in the company was worth $1 million to $5 million. But the company is said to be struggling.

“These steps are being taken to remove even the perception that the mayor’s attention would be diverted from his job as senator or that he would stand to personally benefit in any way from his holdings in the company,” the mayor’s campaign spokesman, Kevin Griffis, said in a statement.

Mr. Booker’s decision to sever his relationship with Waywire came on the same day that he released his tax returns for the last 15 years, showing substantial increases in income as he grew in prominence.

He earned a low of $40,797 in 1998, the year he went from being a community activist to waging a successful bid for a seat on the Municipal Council in Newark. Mr. Booker’s most lucrative year was 2011, when he reported that he received $715,981 in income and paid $221,760, or 33.6 percent, in taxes on the taxable portion of his income, according to his returns.

The income that year consisted almost entirely of his salary as mayor ($152,438), fees he earned for speeches he gave ($406,304) and payments he received from his old law firm for the sale of his stake in the firm ($150,000), according to the returns.

His income dropped significantly in 2012, when he earned $472,572 and paid $115,663, or 36.9 percent, in taxes on the taxable portion of his income. Once again, his earnings were largely from his salary as mayor, his speaking fees and payments from his law firm.

The Booker campaign, which had not released the returns for weeks despite repeated requests to do so, made them available to reporters for three hours on Friday at a conference room inside a hotel in Newark. The reporters were not permitted to make copies.

The returns answered questions that had been hanging over Mr. Booker, including the amount of money he received in payments from his former law firm, Trenk DiPasquale, for his stake after he left in 2006 to serve as mayor.

In all, he received so-called separation payments of $689,500, paid out in annual allotments from 2007 to 2012, according to the tax returns. He received the payments even as the law firm collected more than $2 million in fees from independent authorities, some of whose board members are appointed by the mayor, according to published reports.

Mr. Booker appears to be in a strong position to capture the Senate seat that became vacant with the death of Frank R. Lautenberg in June. After easily winning the Democratic nomination last month, Mr. Booker has emerged as a heavy favorite to win the October general election, in which his Republican opponent is Steven M. Lonegan, a former mayor of Bogota, N.J., and candidate for governor.

Nate Schweber contributed reporting.

You're the Boss Blog: Torn Between Two Start-Up Communities

A social entrepreneur tries to change the way people shop.

Most start-ups fail. It’s a fact. It’s also a fact that I don’t consider failure an option. I started Fashioning Change in San Diego where I went through the Founder Institute, a tech accelerator that connected me to some of the top technology minds in San Diego and around the country. I entered the program as the only social enterprise, as one of the youngest participants and as the only woman of the 23 entrepreneurs accepted.

The program was like drinking from a fire hose. It was tough — the intensity actually brought a couple of the guys to tears and only 11 of the 23 entrants went on to graduate. But the experience was invaluable and connected me to a network of brilliant advisers and mentors that taught me what I needed to know to get Fashioning Change off the ground. Most important, I was able to form relationships with mentors, advisers, and investors through the institute, and I anticipated that once I graduated from the San Diego chapter of the Founder Institute I would continue to build the same types of relationships throughout the San Diego community.

It didn’t take me long to realize, however, that the Founder Institute was ahead of the curve when it came to women in tech and that I was going to have to look beyond San Diego to find the capital and support I needed to build Fashioning Change. Based on my experience, I suspect San Diego suffers from what Brad Feld refers to as the “patriarch problem” in his book “Startup Communities.”

“The first of the classical problems that stall progress in a start-up community is the patriarch problem. In moments of frustration, I call this the old-white-guy problem. At its core, it’s one of the key challenges of a hierarchical organizational model, one in which the most powerful people are the ones at the top of the hierarchy. In many cities, especially in the United States, these patriarchs are the old white guys who made their money many years ago but still run the show.”

As a San Diego native, I found it painful to see the patriarch problem persist at the expense of the start-up community. And because I wasn’t finding the resources we needed to help Fashioning Change grow, I began to seek them in other places — primarily in Santa Monica and the Bay Area. Last spring, I began driving up to Santa Monica two or three times a month. I instantly experienced a positive extension of the small adviser and mentor network I had met through Founder Institute in San Diego. In Santa Monica, I sensed far more excitement about helping one another and seeing the start-up ecosystem grow. Last summer, my drives to Santa Monica increased to two or three times per week.

The start-up ecosystem is exploding around Santa Monica, which is becoming known as Silicon Beach. To my surprise, I soon met several San Diego start-ups that had moved north only after they had reluctantly given up on San Diego. In Santa Monica, even as outsiders, they found mentors and resources to be far more accessible. Every trip north pushed Fashioning Change forward. I would drive up and then drive back filled with energy and information. As we executed on everything, we continued to build traction.

As time passed, I couldn’t shake the feeling that we needed a more permanent presence in Santa Monica. It’s a feeling I fought and struggled with for personal reasons. I didn’t want to turn my back on my city. Also, I’m extremely close to my family. In fact, the process of building my start-up helped me become closer to them because I gave up my cute two-bedroom apartment, sold all of my furniture, and moved back home so that I could cut down on expenses and extend the company’s runway. Living at home allowed me to spend additional time with my older brother who has a disability. On days when the start-up life seemed especially frustrating, coming home always put things into perspective.

Eventually, we decided to rent a Fashioning Change house in Santa Monica that serves as our local headquarters — although we still have an office in San Diego where our developers work. Lately, I’ve been spending a lot of time in San Diego because my co-founder, Kevin Ball, just had a beautiful baby boy. The San Diego office is in a free tech incubator downtown. Last week I was told by the leaders of the incubator that Fashioning Change has to raise more capital.

The people making this demand know nothing about our day-to-day operations. In fact, when we send them update reports, the e-mails aren’t even opened (on MailChimp, you can see who opens the e-mails and how many times). The incubator’s interest in our raising money has little to do with our needs and everything to do with it wanting to report positive news to its own donors. But at this point we have no need to raise more capital, so we’re not going to do it — even if it means we have to move out of the incubator.

We recently heard of a hub of start-ups leasing space in another San Diego downtown building that might be a better location for our San Diego operations. We checked it out, and the leasing company seemed very start-up friendly. One plus is that we would get to be around other start-ups we respect. We will probably make a decision very soon.

Any suggestions? What is your start-up community like? Does it offer the kinds of resources you need?

Adriana Herrera is chief executive of Fashioning Change. You can e-mail her at adrianah@fashioningchange.com, and you can follow her on Twitter at @Adriana_Herrera.