Adam Neumann, co-founder and former chief government officer of WeWork.
Michael Nagle | Bloomberg | Getty Photos
WeWork’s dizzying rise and protracted fall into Chapter 11 chapter safety Monday largely hinged on one man: Adam Neumann.
The previous WeWork CEO based the corporate in 2010 and largely via the power of his character created an actual property juggernaut that was price $47 billion at its January 2019 peak. By the point it filed for chapter safety, WeWork was price a mere $45 million.
“Because the co-founder of WeWork who spent a decade constructing the enterprise with a tremendous crew of mission-driven individuals, the corporate’s anticipated chapter submitting is disappointing,” Neumann mentioned in a press release to CNBC. “It has been difficult for me to look at from the sidelines since 2019 as WeWork has didn’t reap the benefits of a product that’s extra related immediately than ever earlier than. I consider that, with the appropriate technique and crew, a reorganization will allow WeWork to emerge efficiently.”
Neumann stepped down as CEO in Sept. 2019 after critics observed questionable self-dealings within the firm’s IPO submitting, like promoting the trademark to the phrase “We” for $6 million in inventory (which he would later return). Studies across the similar time described an unorthodox administration fashion and a hard-partying atmosphere on the firm. The corporate withdrew its IPO beneath scrutiny, irritating buyers who’d hoped for outsized returns.
Not like many founders who’ve seen their web price evaporate alongside their firm’s fortunes, the 44-year-old Neumann probably stays a rich man.
A sizeable portion of that wealth was accrued after Neumann stepped away from the corporate, because it girded up as soon as once more for a public providing, this time by way of a particular function acquisition firm.
As a part of that SPAC course of, SoftBank reportedly paid Neumann a reported $480 million for half of his remaining stake in WeWork in 2021. The funding big had initially tried to again out of shopping for Neumann’s full stake, valued at $1 billion, prompting a go well with from the previous CEO.
Neumann additionally reportedly collected one other $185 million as a part of a non-compete settlement and an additional $106 million as a part of a settlement. In all, regardless of being faraway from a administration position years earlier, Neumann reportedly collected round $770 million in money from the 2021 SPAC course of alone.
Neumann additionally nonetheless retained a stake within the firm valued at round $722 million when WeWork debuted in 2021, Bloomberg reported. Following the chapter submitting, these shares are nugatory, though it is not recognized what number of — if any — he nonetheless holds.
As the corporate’s market cap spiraled downward, Neumann launched into one other real-estate tech enterprise, referred to as Move. Valued at $1 billion and flush with a $350 million examine from enterprise capital agency Andreesen Horowitz, the corporate promised to resolve inequities within the rental-housing market by creating a way of neighborhood and serving to renters construct fairness of their properties.
Move has reportedly constructed up a portfolio of three,000 items in main metropolitan areas, with Neumann describing the corporate’s strategy as a “technology-first” enterprise. On the floor stage, it might appear to be a continuation of Neumann’s strategy with WeWork, tailored for the residential market, with the potential for a monetary companies arm as nicely. Move’s web site lacks additional element, though the corporate is hiring for a number of positions throughout the U.S.
In an October look on CNBC, Neumann emphasised how his upbringing formed his enterprise ventures. “The WeWork journey was a tremendous one,” Neumann mentioned.
“Move is one other iteration of the identical story, which is: when individuals reside in neighborhood, when individuals reside collectively, when individuals clearly have variations,” Neumann continued, “there’s all the time a standard floor.”
