WeWork founder Adam Neumann’s latest venture meets skepticism on social media

WeWork founder Adam Neumann’s latest venture meets skepticism on social media

It’s been an ugly week or a fantastic week for WeWork co-founder Adam Neumann, depending on who’s talking.

For Neumann, his new home real estate company called Flow attracted a hefty $1 billion valuation and a $350 million venture capital investment from high-profile tech investor Marc Andreessen of a16z, aka Andreessen Horowitz. That’s the fantastic part for him.

The ugliness comes from the view that flexible workspace provider WeWork was in a mess when it canceled its initial public offering in 2019 and Neumann was kicked out of the company.

To understand the reviews, it’s helpful to know some of the key facts about WeWork, Flow, Neumann, and Marc Andreessen.

Another high-profile technology investor, Softbank Group SFTBY,
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had invested $18.5 billion in WeWork, a company executive said in 2019. At one point, WeWork had a private company valuation of $47 billion.

At last check, WeWork’s market cap is now $3.8 billion after going public in late 2021 with a valuation of $9 billion. Its stock price has dropped below $5 a share now, from a high of around $13 shortly after its debut.

We Co.’s rapid expansion and flexible business model. helped it stay ahead of competitors. But some investors are saying its public offering may not be worth the risk. Here’s why. Photo: David ‘Dee’ Delgado/Bloomberg

For his part, Neumann has made at least $1 billion from WeWork, including the sale of $500 million worth of WeWork stock by himself and another WeWork co-founder. He also earned $200 million in consulting and other fees from the Softbank Group and the sale of an additional $578 million in stock to Softbank, according to the Wall Street Journal.

Comments about WeWork’s collapse, Adam Neumann’s reputation and whether Andreessen was being smart or dumb to invest in Flow circulated on social media this week.

“I don’t understand the hatred for Adam Neumann,” he said. @paulbiggar on twitter. “He is about to burn $350 million that was funding endless cryptocurrency scams. Man is doing God’s work. A true comrade.”

“If Adam Neumann can raise $350 million in a bear market, you can ask for that 8% increase to keep up with inflation,” he said. @litcapital

“Still kind of amazing that Adam Neumann became a billionaire in the process of turning $22 billion in invested capital into $4 billion in market value,” he said. @Noahpinion.

Some have compared Neumann to Elizabeth Holmes, the former Silicon Valley darling and co-founder of Theranos who was convicted in January of two counts of wire fraud and two counts of conspiracy to commit fraud in connection with product claims she made for the device. company blood test.

“Elizabeth Holmes, founder of Theranos, lost $1 billion to investors. She faces up to 20 years in prison. Adam Neumann, founder of WeWork, lost $11 billion to investors. He then raised $350 million for his next startup.” @fintwitt_news.

Nonetheless, @kalavros said that comparisons with Holmes are not valid because Neumann gave life to a billion-dollar company and that losing billions in valuation is not a crime, while healthcare fraud is.

Others reacted to the fact that Neumann pulled a big risk check as a white man, while other startups led by women and people of color have trouble raising capital.

“There’s no way in hell my black ass would have more than one chance, let alone as many as this particular mediocre, normal white guy got,” he said. @KimCrayton1 . “He lost BILLIONS and is still entitled to lose more.”

LinkedIn comments also attracted responses from industry professionals.

“Who will be the hero and the first person to give a woman $350 million in funding with a $1 billion valuation for a business that doesn’t yet exist?” said Ashley Louise, CEO of Ladies Get Paid.

Other media outlets joined the fray with bold headlines:

Adam Neumann’s $350 million return is a “slap in the face” for female founders of color, proclaimed Fortune magazine.

The handing over of $350 million from Silicon Valley to a WeWork co-founder is a sign of a venture capital apocalypse, Insider said.

Neither Neumann nor Andreessen provided additional comments after being contacted by MarketWatch.

Evidence of Neumann’s new business, Flow, emerged in January, when the Wall Street Journal reported that Neumann had acquired stakes in 4,000 apartments valued at $1 billion.

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