Sep 29, 2021 - Economy

Scoop: OZY Media loses an early investor

Illustration of OZY logo.

Illustration: Rae Cook/Axios

One of OZY Media's earliest investors has surrendered its shares in the beleaguered company, Axios has learned.

Driving the news: SV Angel, led by legendary Silicon Valley venture capitalist Ron Conway, informed OZY yesterday that it no longer wants the stock it acquired back in 2012, per multiple sources. Conway declined comment.

Why it matters: It is extremely rare for a VC firm to surrender shares; a rebuke several levels above choosing not to invest further.

What OZY is saying: Nothing. At least not to Axios.

  • OZY co-founder and CEO Carlos Watson did set up a call with us for yesterday morning, and said that chairman Marc Lasry would also participate. But the scheduled time came and went, and our follow-up messages went unanswered.
  • Too bad we got the 👻, particularly because we still have questions about whether or not OZY raised new funding after the Goldman deal collapsed. Several passive investors in the company tell us that they heard nothing of it. One did say OZY conveyed info that a round was in progress, but wasn't sure it ever closed.

But there have been developments since yesterday:

  • OZY's board of directors last night announced that it hired an outside law firm to launch an investigation, "following reports of conduct that is not in keeping with our standards of values."
  • This statement is back-peddling by a board that previously said it knew what was in the reporting, but still opted not to investigate. What's changed is the sunlight.
  • OZY also said it asked COO Samir Rao to take a leave of absence, pending the investigation's results.
  • As a side note, OZY was recruiting for a new COO last fall, per a pitch-deck obtained by Axios. No word on what happened with that process.
  • OZY postponed a live event in Miami that was scheduled for Oct. 16, and Watson stepped down as a host of last night's News & Documentary Emmy Awards.
  • Watson continues to serve on the board of NPR, which he joined in 2016. An NPR spokesperson tells Axios: "Our board is aware of the NYT story, and consistent with our corporate governance, the governance committee will be considering these developments."

The bottom line: An investment in Ozy has become a reputational headache. SV Angel took the most extreme step, but others are distancing themselves, both publicly and privately.

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