New York, NY – Adam Neumann, co-founder and former CEO of WeWork, is reportedly trying to take back control of the struggling co-working startup he helped launch over a decade ago. According to a report by DealBook on Tuesday, Neumann has been expressing interest in acquiring WeWork since late 2022.
WeWork filed for bankruptcy in November 2023 after a disastrous IPO attempt in 2019 led to Neumann’s ouster as CEO. However, it seems the controversial co-founder is looking for a second chance to lead the company he started in 2010.
Neumann has apparently been working with his new startup, Flow, and hedge fund Third Point, run by investor Dan Loeb, to put together a proposal to buy WeWork out of bankruptcy. According to a letter obtained by DealBook, Neumann’s legal counsel claims he first tried to arrange up to $1 billion in financing back in October 2022 to regain control of WeWork. At the time, newly appointed WeWork CEO Sandeep Mathrani reportedly rejected the offer.
The letter states that Neumann and his partners have “consistently expressed sincere interest” in acquiring WeWork since December 2023. Their proposals include buying WeWork’s property leases and providing debtor-in-possession financing that would give them priority over other creditors in the bankruptcy proceedings.
Initially, WeWork’s legal advisors resisted Neumann’s overtures. However, they eventually suggested that Neumann provide DIP financing rather than submitting an official term sheet for a takeover deal. Apparently, the two sides have been exchanging proposed terms for a non-disclosure agreement to allow due diligence and negotiations to move forward.
The WeWork saga under Neumann was marked by failed corporate governance, unrealistic growth expectations, and a botched IPO attempt in 2019. Once valued at $47 billion, the company’s worth quickly plummeted as investors soured on its financials and leadership. Neumann walked away with a generous exit package estimated at $1.7 billion as the company he founded crumbled.
Now, with new leadership and a bankruptcy restructuring in place, WeWork may finally be in a position to realize its original vision – co-working spaces designed for productivity, community, and innovation. However, some experts question whether handing back the reins to Neumann would be a prudent move.
Neumann still maintains strong ties to WeWork, owning about 10% of the company’s stock. He clearly desires a second shot at leading the co-working firm he built from scratch. But only time will tell if WeWork and its creditors feel the serial entrepreneur can complete the turnaround he started years ago.
The saga of WeWork and Adam Neumann offers fascinating insights into the volatility of Silicon Valley startups. Founders’ big visions can quickly unravel without proper oversight and realistic business models. However, seasoned entrepreneurs often learn from early failures. Neumann may yet redeem himself and lead WeWork to prosperity if given the chance.
