In the middle of August 2022, Andreessen Horowitz, the King Arthur’s knights of venture capital firms, announced that it would provide the highest amount of round A funding for a risk investment in their history ever (up until now): 350 million US Dollars.
The recipient is a startup called called Flow. Flow is the new real estate company established by former WeWork founder and CEO, Adam Neumann. Flow’s goal is to provide community serviced residential living.
Sounds like a euphemism for real estate administration, facility management and a few additional services for affluent but busy renters like dog walking and apartment cleaning. Make a mental note that Flow’s URL is flow.life.
During his tenure as CEO of WeWork:
- Adam Neumann was alleged of self-dealing and self-enrichment, by for example acquiring the trademark “We” and licensing the word “We” back to WeWork (his own company!) for 5.9 million US Dollars, which ultimately he had to pay back.
- Adam Neumann was reported to have taken 700 million US Dollars out of WeWork.
- Adam Neumann was alleged of behavior to fund eccentricities like but not limited to appearing drunk and barefoot on stage or at offices, forcing Tequila shots on employees and chartering a huge plane for an overseas flight where he and his friends smoked pot.
- Adam Neumann was unable to turn WeWork profitable.
- WeWork made profit projections to investors although it incurred significant losses in reality.
- Adam Neumann was sued by minority shareholders for breaching his fiduciary duties towards WeWork.
Adam Neumann ultimately had to step down for all of this and some more as the CEO of WeWork in 2019. To make sure he was gone, Softbank, who invested 17 billion US Dollars into his company initially paid Neumann 1.7 billion US Dollars severance pay.
Everybody should be given a second chance, but how Adam Neumann’s business record and incompliances make him worthy of new venture capital to a remarkable tune for yet another real estate company escapes me.