Anti-Climax: Poster Boy for Start-ups Adam Neumann Steps Aside
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The WeWork Companies Inc saga is heading towards an intriguing end. After months of anticipation that the company will go public, co-founder and CEO Adam Neumann finally resigned and will take up a non-executive role.
“While our business has never been stronger, in recent weeks, the scrutiny directed toward me has become a significant distraction, I have decided that it is in the best interest of the company to step down as chief executive,” Neumann said in a statement.
Sebastian Gunningham and Artie Minson, two senior executives of the company, have been appointed as the co-CEOs.
The Culminating Battle of Neumann
Neumann, the larger-than-life entrepreneur--who became a household name after launching his company in 2010 in California--has been ruffling feathers for quite some time, but now speculations have come to a rest.
The issue started with WeWork announcing its intention to go public, but weak financial position and doubts over an uncertain path ahead soon cropped up.
Several media houses reported The We Company, parent company of WeWork, is bringing down its valuation to $10 billion for the IPO, less than one-fourth of the $47 billion valuation of the company a week ahead of its IPO. There were also reports of Neumann flying down to Tokyo to meet the company’s biggest backer, Softbank, to seek help potentially in the form of funds.
Controversies around the co-working start-up kept doing rounds and then, suddenly, the news of it shelving its IPO surfaced. In a report by CNBC, it was reported that the company gathered all its employees in a meeting to discuss the situation. Neumann, apparently, told his employees that the delay would help them prepare better for the public listing and also give them the time to position themselves in a better capacity before investors.
The tale of Neumann has ended on a disappointing note. Unfortunately, Neumann failed to prove his leadership and was unable to revive the company from spiraling down.
WeWork’s Rise and Fall
WeWork was founded by Neumann and Miguel Mckelvey in 2010. Over the years, it raised several rounds of funding before it became a Unicorn--a label popular in the start-up ecosystem--in 2014 with Series C round of funding. The company became the rockstar start-up of Silicon Valley with a sterling reputation backed by marquee investors such as Sequoia, SoftBank, Goldman Sachs and JP Morgan, among others. At one point, WeWork was known for the high valuation game which had almost become a benchmark for other start-ups in and around the valley as well as the world. Today, the same valuation has become an albatross hung around its neck. The company thought that an IPO could be the last resort to save the boat from capsizing completely, but the company burst several bubbles to meet the fate it has.