It’s been either an ugly week or a fantastic week for WeWork co-founder Adam Neumann, depending on who takes the floor.
For Neumann, his new residential real estate venture, called Flow, achieved a lofty valuation of $1 billion and a $350 million venture capital investment from high-profile tech investor Marc Andreessen of a16z, aka Andreessen Horowitz. That’s what’s fantastic for him.
The ugliness stems from the view that flexible workspace provider WeWork was a hot mess when it canceled its IPO in 2019 and Neumann was forced out of the company.
To understand the comments, it helps to know some of the key facts surrounding WeWork, Flow, Neumann, and Marc Andreessen.
Another high-profile tech investor, Softbank Group SFTBY,
had put $18.5 billion into WeWork executive at the company 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, having gone public in late 2021 with a valuation of $9 billion. The stock price has fallen below $5 a share from a peak of about $13 shortly after its debut.
Neumann for his part made at least $1 billion of WeWork, including selling $500 million in WeWork stock by himself and another WeWork co-founder. He also earned $200 million in consulting and other fees from Softbank Group and the sale of an additional $578 million in stock to Softbank, according to the Wall Street Journal.
Comments on the WeWork flameout, Adam Neumann’s reputation, and whether Andreessen was smart or stupid about investing in Flow swirled on social media this week.
“I don’t understand the hatred of Adam Neumann,” he said @paulbiggar on twitter. “He is about to burn $350 million that funded endless crypto scams. The man is doing God’s work. A true comrade.”
“If Adam Neumann can raise $350 million in a venture bear market, you can ask for that 8 percent raise to keep up with inflation,” he said @litcapital
“Kind of amazing that Adam Neumann became a billionaire while turning $22 billion in invested capital into $4 billion in market value,” he said @Noahpinion.
Some compared Neumann to Elizabeth Holmes, the former Silicon Valley darling and co-founder of Theranos, who was convicted in January on two counts of wire fraud and two counts of conspiracy to commit fraud related to product claims she made about the company’s blood analyzer .
“Elizabeth Holmes, founder of Theranos, lost $1 billion to investors. You face up to 20 years in prison. Adam Neumann, founder of WeWork, lost $11 billion to investors. Then he raised $350 million for his next startup,” he said @fintwit_news.
However, @kalavros These Holmes comparisons are not valid because Neumann started a billion dollar company and that losing billions in reviews is not a crime while health fraud is a crime.
Others responded to the fact that Neumann received a large venture check as a white male, while other startups run by women and people of color are having trouble raising capital.
“There’s no way my black ass would be given more than one chance, much less so many like this mediocre, unremarkable white guy,” he said @KimCrayton1 . “He’s lost BILLIONS and can always lose more.”
LinkedIn comments also drew replies from industry professionals.
“Who will be the hero and be the first person to give a woman $350 million in funding with a $1 billion valuation for a company that doesn’t exist yet?” said Ashley LouiseCEO of Ladies Get Paid.
Other media joined the fray with bold headlines:
Adam Neumann’s $350M comeback is a “slap in the face” for founders of color, Fortune Magazine proclaimed.
Silicon Valley handover of $350 million to a WeWork co-founder signals VC apocalypse, Insider said.
Neither Neumann nor Andreessen commented further after contacting MarketWatch.
References to Neumann’s new business, Flow, surfaced in the Wall Street Journal in January reported that Neumann had acquired interests in 4,000 homes valued at $1 billion.
https://www.marketwatch.com/story/adam-neumanns-latest-venture-draws-social-media-skepticism-11660924024?rss=1&siteid=rss WeWork founder Adam Neumann’s latest venture has met with social media skepticism