WeWork - the $47B fraud?

While I’ve seen tons of people talking trash about WeWork and its founder for the last weeks...

Everyone is missing the bigger picture.

This is not about a company going bankrupt.

This is not about a crazy founder.

This is not about the whole VC-backed system breaking down.

This is about a game that’s been played for decades with rules created by investors…

And for once, these rules benefited tremendously a founder: Adam Neumann.

If you came here for drama, TV shows, and more stories about Adam Neumann and his wife… 👇

You can skip this article.

But if you want to understand how Adam Neumann won from 3 different angles - keep reading.

How Adam won BIG financially

Adam Neumann is an exceptional sales guy.

No matter what people say, Adam Neumann played the “fundraising game” by the rules.

From the early days of WeWork, he managed to convince investors to give him money so he could fulfill his dream “to elevate the world’s consciousness.”

But how did Adam Neumann become a billionaire with WeWork, while the company is going bankrupt?

And was he the only one who made money?

To understand that, you gotta go back to 2010, when WeWork was created.

From their early days to their IPO in 2021, WeWork did 9 different funding rounds.

Their Series A was actually led by a famous fund called Benchmark Capital. The same fund that invested in Uber, eBay, DropBox, Netflix, and more.

Every time someone raises more money or does what we call another “round of funding,” the valuation of the company increases. This means that early investors are theoretically making more money.

The reason I say theoretically is because the company’s valuation is not liquid. No investors are getting their money back until the company gets acquired or, in the case of WeWork, does an IPO and goes public.

So for Adam, he actually managed also to make a lot of money to his early investors.

While all the later-stage investors, including SoftBank, lost A LOT of money…

Adam got especially rich because the board wasn’t happy with how he was running the company, and they decided to fire him in exchange for money.

Once again, he played by the rules - negotiating an exit package with his investors, who all agreed and voted for it to happen.

So why all the fuss?

That’s when comes part 2…

Adam WON against one of the biggest VC investor

I’ve seen tons of posts about how “investors got screwed over”…

Most of these people have never gone through a due diligence process once in their lifetime..

I’ve sold one company, grew one bootstrapped to $20M+ of dollars, and also cashed out $30M recently from investors.

And I can tell you that when investors are giving you money, they know exactly in which company they invest.

That’s what a due diligence is all about.

EVERY SINGLE investor knew the ins and outs of WeWork when they invested.

They knew it wasn’t a tech company.

They knew the revenue it was generating and all its financials.

We’re talking about professional investors with billions of dollars of assets under management.

They don’t get fooled by “the founder was hiding stuff”…

So why did they invest if they knew about the bad financial health?

Hype? Fame? Fear Of Missing Out?

Maybe a bit of everything… but they certainly knew what they were getting into.

So why are they being such sore losers?

1- Usually, when investors lose, the founder loses more. In that case, Adam made A LOT of money and still won BIG time.

2- WeWork is a well-known brand worldwide, and the only thing people are talking about now is how SoftBank has lost billions of dollars (not a good PR…)

3- WeCrashed did not help…

Adam wanted to do something that would change the world, and he did it

No matter how the story ends, the whole WeWork team must be proud of what they’ve accomplished.

WeWork was created in 2010 and managed to create a whole new market that didn’t exist before.

While I see a lot of people being happy to see WeWork going bankrupt, here are some questions👇

How many successful companies were created in co-working spaces?

Where would people be working if the only way to get an office was to sign a 3-year lease?

How many freelancers would be depressed because of the lack of community in cafes?

How many people would have never launched their company because they thought it was too hard to find other people in the same boat?

How much of an impact does your work environment have on what you can accomplish as an entrepreneur?

How many businesses were saved from bankruptcy because they could downsize their workspace instantly in tough times?

What is the impact of flexible workspaces in fueling the creator economy?

WeWork changed entirely the way we work, build, and grow companies.

So to everyone who worked or helped build WeWork - thank you for everything ❤️

And for everyone who’s gonna lose their job, feel free to reach out to me directly at guillaume@lempire.com, I’ve got thousands of founders in my network who are looking to hire talented people like yourself.

Peace, love and profit 💰