WeWork’s dizzying rise and protracted fall into Chapter 11 bankruptcy protection Monday largely hinged on one man: Adam Neumann.
The former WeWork CEO founded the company in 2010 and largely through the force of his personality created a real estate juggernaut that was worth $47 billion at its January 2019 peak. By the time it filed for bankruptcy protection, WeWork was worth a mere $45 million.
“As the co-founder of WeWork who spent a decade building the business with an amazing team of mission-driven people, the company’s anticipated bankruptcy filing is disappointing,” Neumann said in a statement to CNBC. “It has been challenging for me to watch from the sidelines since 2019 as WeWork has failed to take advantage of a product that is more relevant today than ever before. I believe that, with the right strategy and team, a reorganization will enable WeWork to emerge successfully.”
Neumann stepped down as CEO in Sept. 2019 after critics noticed questionable self-dealings in the company’s IPO filing, like selling the trademark to the word “We” for $6 million in stock (which he would later return). Reports around the same time described an unorthodox management style and a hard-partying environment at the company. The company withdrew its IPO under scrutiny, frustrating investors who’d hoped for outsized returns.
Unlike many founders who have seen their net worth evaporate alongside their company’s fortunes, the 44-year-old Neumann likely remains a wealthy man.
A sizeable portion of that wealth was accumulated after Neumann stepped away from the company, as it girded up once again for a public offering, this time via a special purpose acquisition company.
As part of that SPAC process, SoftBank reportedly paid Neumann a reported $480 million for half of his remaining stake in WeWork in 2021. The investment giant had initially attempted to back out of buying Neumann’s full stake, valued at $1 billion, prompting a suit from the former CEO.
Neumann also reportedly collected another $185 million as part of a non-compete agreement and a further $106 million as part of a settlement. In all, despite being removed from a management role years earlier, Neumann reportedly collected around $770 million in cash from the 2021 SPAC process alone.
Neumann also still retained a stake in the company valued at around $722 million when WeWork debuted in 2021, Bloomberg reported. Following the bankruptcy filing, those shares are worthless, although it’s not known how many — if any — he still holds.
As the company’s market cap spiraled downward, Neumann embarked on another real-estate tech venture, called Flow. Valued at $1 billion and flush with a $350 million check from venture capital firm Andreesen Horowitz, the company promised to solve inequities in the rental-housing market by creating a sense of community and helping renters build equity in their homes.
Flow has reportedly built up a portfolio of 3,000 units in major metropolitan areas, with Neumann describing the company’s approach as a “technology-first” venture. At the surface level, it would seem to be a continuation of Neumann’s approach with WeWork, adapted for the residential market, with the possibility of a financial services arm as well. Flow’s website lacks further detail, although the company is hiring for several positions across the U.S.
In an October appearance on CNBC, Neumann emphasized how his upbringing shaped his business ventures. “The WeWork journey was an amazing one,” Neumann said.
“Flow is another iteration of the same story, which is: when people live in community, when people live together, when people obviously have differences,” Neumann continued, “there’s always a common ground.”
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