The career rise, fall, and attempted return of Adam Neumann, the controversial WeWork cofounder

Tue, 02/06/2024 - 10:59

wework adam neumann 4 4x3 — Adam Neumann stepped down as WeWork CEO in 2019.
Eduardo Munoz/Reuters; Samantha Lee/Business Insider

Adam Neumann ran WeWork for nearly a decade, but his role came to an abrupt end in late 2019.
WeWork filed for Chapter 11 bankruptcy in November after struggling to fill offices.
Neumann's company Flow Global is trying to buy WeWork, DealBook and Bloomberg reported.

Adam Neumann, 43, was born in Israel in 1979.

His parents got divorced when he was 7, and he moved around a lot as a child with his mother — he reportedly lived in 13 different homes by the time he was 22.

Source: New York Magazine

As a child, Neumann lived for some time on an Israeli kibbutz, one of the collective community settlements across the country. Neumann attended school near the Gaza Strip while his mother worked as a doctor at a nearby hospital.

kibbutz nir am israel — Kibbutz Nir Am, where Neumann lived as a child.
Reuters/Amir Cohen

Source: Haaretz

Neumann is severely dyslexic, and couldn't read or write until he was in third grade.

Source: Forbes

Neumann served in the Israel Defense Forces after grade school.

He served in the navy for five years, although only three years of service is required. "That's where I got to know a lot of my best friends," Neumann told Haaretz in 2017.

Source: Haaretz

After leaving the IDF, Neumann moved in 2001 to New York City.

tribeca nyc — Katie Warren/Business Insider

He where he lived in a Tribeca apartment with his sister Adi, went to clubs and started "hitting on every girl in the city," he said in a commencement speech in 2017.

Source: New York Magazine

Neumann enrolled at city school Baruch College in January 2002 and majored in business.

He said he thought of the concept of WeLive, WeWork's communal living business, for a school entrepreneurship competition.

However, the idea was killed in the competition's second round, because a professor didn't think Neumann would be able to raise enough money "to change the way people live."

Sources: New York Magazine, TechCrunch

Neumann dropped out from college just four credits shy of graduating.

adam neumann commencement speech baruch college — Neumann delivering his Baruch College commencement speech in 2017.
WeWork/YouTube

He ultimately finished his degree 15 years later, in 2017, after completing a four-month independent study, and delivered the commencement speech for Baruch College's graduating class.

Sources: TechCrunch, Business Insider

While in college, Neumann met his now-wife, Rebekah Paltrow Neumann, a cousin of actress Gwyneth Paltrow. The pair married in 2009, and have five children.

adam and rebekah neumann — Theo Wargo/Getty Images

Source: Observer, Real Deal

On their first date, Paltrow Neumann called out the WeWork cofounder for being "full of s---."

WeWork Adam Neumann and Rebekah Paltrow Neumann — WeWork husband/wife team Rebekah Paltrow Neumann and Adam Neumann.
Fortune

Neumann credits his wife for getting him to stop smoking, and for telling him to pursue his passions instead of dreams to be rich.

Sources: Business Insider

Paltrow Neumann became the founder and CEO of WeGrow.

adam Rebekah Neumann — Evan Agostini/Invision/AP

WeGrow was under the WeWork company umbrella and operated an elementary school in New York before shutting down in 2019. She was a WeWork founding partner, when she learned there's "no job too big or too small for each person."

Sources: Coveteur, WeGrow

While Neumann was at college, he worked on two business ventures: a failed idea for collapsible heeled shoe, and baby clothes with built-in knee-pads called Krawlers.

adam neumann wework — Adam Neumann, chief executive officer of U.S. co-working firm WeWork, speaks during a signing ceremony in Shanghai, China April 12, 2018.
Jackal Pan/Reuters

He dropped out to pursue the second idea, and developed it into a baby-clothing company called Egg Baby in 2006.

Egg Baby is still around today as a luxury baby clothing company headed up by clothes designer Suzan Lazar. Neumann is no longer involved in the day-to-day operations of Egg Baby, whose children's clothing is sold at department stores.

Sources: Forbes, TechCrunch

Soon after launching Egg Baby, Neumann met WeWork cofounder Miguel McKelvey through a mutual friend.

miguel mckelvey adam neumann cofounders wework — Miguel McKelvey and Adam Neumann.
Scott Legato/Getty

The two reportedly bonded over their backgrounds and competitive streaks, and McKelvey convinced Neumann to move Egg Baby offices to the same building he was working out of in Brooklyn.

Soon after, the two developed the idea for WeWork after brainstorming an idea for renting out empty office space to other companies. In 2008, they convinced their building's landlord to let them rent out a floor in a nearby Brooklyn building, and an earth-friendly co-working company called Green Desk was born.

Source: Forbes, New York Magazine

However, McKelvey and Neumann decided to go off on their own.

Original WeWork Building 154 Grand St Soho — The first WeWork building at the corner of Grand and Lafayette streets in New York City.
Original WeWork Building at 154 Grand Street in NYC's SoHo.

They sold off their share of Green Desk to their landlord for $3 million, and opened their first WeWork space in 2010 in New York's Little Italy neighborhood.

Sources: Forbes, New York Magazine

Under Neumann as CEO, WeWork expanded to provide co-working desk space in commercial buildings in more than 120 cities in nearly 40 countries. The company was valued at $47 billion.

adam neumann wework we company ceo — Adam Neumann, CEO of The We Company.
AP Photo/Mark Lennihan

Sources: Business Insider, Forbes

Paige Leskin contributed earlier reporting to this story.

One of WeWork's biggest investors was the Japanese investment firm SoftBank, which invested more than $10 billion in the company.

Neumann has told Business Insider about his close relationship with SoftBank CEO Masayoshi Son, who he calls "Yoda."

Source: Business Insider

Neumann was worth an estimated $4 billion at his peak.

After founding WeWork, Neumann spent over $80 million on five homes, including two properties in New York City and one home in the Hamptons. In 2018, he reportedly purchased a 13,000-square-foot home in the San Francisco area, complete with a guitar-shaped room, worth $21 million.

Neumann also invested in a number of startups, both by himself and on behalf of WeWork. His niche-interest investments included a wave-pool maker, a medical marijuana provider, and a superfood startup, which sells things like "performance mushrooms," powdered coconut water infused with beets and turmeric, and highly caffeinated coffee.

Neumann was WeWork's largest single shareholder. However, he cashed out some of his stake and took out loans. In total, Neumann's sales and debt transactions reportedly totaled $700 million.

Sources: Wall Street Journal, Business Insider

The company publicly filed for an IPO on August 14, 2019.

Adam Neumann WeWork Presents The San Francisco Creator Awards At The Palace of Fine Arts Theatre — Kelly Sullivan/Getty Images

The IPO filing gave the public its best view yet at the company's financial health: notably, $1.6 billion in losses on $1.8 billion in revenue in 2018.

However, along with WeWork's IPO paperwork came further scrutiny of its business.

we company wework rebrand — The We Company

The filings showed that WeWork paid Neumann just shy of $6 million for the trademark rights for the "we" family trademarks for the company's name change to the We Company in January 2019. After widespread criticism, Neumann paid the money back.

The IPO paperwork also revealed a number of Neumann's potential conflicts of interest regarding WeWork. Neumann was revealed to have personal financial ties to WeWork buildings, and his wife, Rebekah, was listed as one of three people who would decide the next CEO if Neumann could no longer run the company.

WeWork limited her power by removing her ability to help choose the next CEO, and also banned her and any of Neumann's family members from serving on the board.

Source: Business Insider

Shortly after the IPO was filed, a report revealed that WeWork had been bleeding HR managers.

Some pointed fingers at Neumann himself as the reason. Neumann reportedly criticized some employees as "B players" behind their backs.

The IPO paperwork also showed that Neumann had special shares in WeWork that gave him a massive 20 votes per share, as well as majority control over the company.

His power was limited in WeWork's amended IPO filing in September 2019, in which the company slashed its valuation from $47 billion to below $20 billion.

In September 2019, a Wall Street Journal report detailed Neumann's hard-partying ways, and drug and alcohol use.

Two of the most startling revelations in the piece: Once after announcing layoffs, Neumann sent around tequila shots and organized a surprise Run-DMC concert. Also, his private jet was once recalled in Israel after marijuana was found hidden in an onboard cereal box.

Amidst the criticism, Neumann's leadership of WeWork was thrown into question. WeWork's board of directors met in September 2019 to discuss the possibility of removing Neumann as CEO — something reportedly backed by one of Neumann's best assets, SoftBank head Masayoshi Son.

Source: Wall Street Journal

On September 24, Neumann said he would be stepping down from his role as WeWork CEO. Neumann said in a statement that he had become a "significant distraction" in recent weeks, and it was in the company's "best interest" to resign. Two WeWork executives — Sebastian Gunningham and Artie Minson — took his place as co-CEOs. The company then withdrew its S-1 filing, officially postponing its IPO.

Artie Minson (left) and Sebastian Gunningham, WeWork CEOs — Artie Minson (left) and Sebastian Gunningham, WeWork temporary CEOs.
We Company; Samantha Lee/Business Insider

Source: Business Insider

Neumann put at least two of his properties up for sale. Both his three-floor New York City penthouse and Hamptons house were put on the market. His Hamptons house sold for $1.25 million in March 2020.

adam neumann 78 irving place nyc apartment — Neumann's penthouse at 78 Irving Place.
Compass

Source: Business Insider, Mansion Global

Neumann momentarily kept his role as chairman of WeWork's board of directors, but he stepped down from the board in October 2019.

SoftBank, WeWork's largest investor, was given control of the company as part of a $9.5 billion bailout plan. As part of the buyout deal, SoftBank planned to provide Neumann with a $1.7 billion exit package.

SoftBank had planned to purchase $3 billion worth of shares from investors and employees — including shares from Neumann worth $970 million — but backed out, citing "multiple, new, and significant" civil and criminal investigations into WeWork.

Source: Wall Street Journal, Business Insider

Neumann said he had regrets about WeWork's drop from a $47 billion valuation to $7 billion after the company's failed IPO.

A screengrab from — AppleTV+; Michael Kovac/Getty Images for WeWork

But he didn't apologize to employees who lost their jobs, and whose stock options lost value while he left the company with $180 million from SoftBank, WeWork's largest investor.

After not speaking publicly for two years, Neumann sat down for an interview with Andrew Ross Sorkin in November 2021. He was asked about the thousands of employees who lost their jobs, how much money he walked away with after leaving WeWork, and selling the "we" family trademarks.

Source: Business Insider

Flow was valued at $1 billion in 2022, and Neumann spent over $1 billion last year purchasing 3,000 housing units for the startup.

Miami, Florida — Miami, FL
Sylvain Sonnet/Getty Images

Neumann got back in the startup game in 2022 with a rental-housing company called Flow. Andreessen Horowitz, or A16z, invested $350 million into the startup — the firm's largest single investment at the time.

A contributing factor in Neumann's downfall from WeWork was leasing office properties he owned back to WeWork. Flow is operating in the properties owned by Neumann. The units are in Atlanta, Nashville, Tennessee, Fort Lauderdale, and Miami.

Source: Business Insider

A16z previously invested in FlowCarbon, Neumann's crypto startup for tokenizing carbon credits and allowing renewable-energy developers to trade those tokens. In a round led by A16z, the startup raised $32 million.

marc andreesen a16z — Justin Sullivan/Getty Images

Source: Business Insider

In October 2023 Neumann condemned Hamas' attack on Israel and the loss of innocent lives in both Palestine and Israel during the ongoing conflict.

Israeli flag — Europa Press News/Getty Images

Source: CNBC

Less than a month before WeWork filed for bankruptcy, Neumann looked back fondly on the "unbelievable team" at the company and said it was hard to watch the company struggle from the sidelines.

WeWork cofounder Adam Neumann — Shahar Azran/Getty Images

Source: CNBC

WeWork filed for bankruptcy on November 6, 2023.

Neumann released a statement expressing his disappointment with the filing and the company's failure to "take advantage of a product that is more relevant today than ever before."

"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," he said.

"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."

Source: Business Insider

Neumann's real estate company is reportedly interested in buying WeWork.

Former WeWork CEO Adam Neumann — Shahar Azran/Getty Images

Neumann's Flow Global has been trying to buy the now-bankrupt WeWork for months, DealBook and Bloomberg reported. The real estate company has reportedly offered to buy Wework or its assets out of bankruptcy.

Flow Global's lawyers accused WeWork of a "lack of engagement" with the potential deal over the past several months.

Source: DealBook

Correction: November 10, 2023 — An earlier version of this story misstated the status of FlowCarbon. A company representative says FlowCarbon is growing in staff and actively conducting transactions.

Read the original article on Business Insider

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The career rise, fall, and attempted return of Adam Neumann, the controversial …