The goal was a collaborative environment where ideas could be shared and made profitable.įounded in 2010, WeWork grew to 390 locations by 2019, which was the same year that the company was scheduled to go public at a nearly $50 billion valuation.īut just before the IPO, major questions started to arise… WeWork’s initial business model was to rent large office spaces cheaply via long-term leases and then to rent small parcels of those properties to small businesses and individuals, particularly startups. This relationship and others enabled Neumann to raise over $11 billion in just under a decade. Jamie Dimon, the CEO of JPMorgan, even served as one of Neumann’s advisers. Softbank (OTCMKTS: SFTBY), Harvard Management Group, Benchmark Capital and JPMorgan Chase (NYSE: JPM) were just some of the institutional-level investors that believed in WeWork. Neumann was able to make incredible finance connections as he built WeWork (NYSE: WE). Standing 6-foot-5, Adam Neumann was the man who sold the dream of “working together and belonging” to some of the top VC and private equity investors in the world. I’ll share these cautionary tales - and some tactics you can use to avoid making the same mistakes… But these dream sellers were unable to reach their ultimate goals, and investors ended up losing big. Today I’m going to share the stories of two sellers of dreams who raised billions of dollars in private funding from some of the biggest names in the business. However, some entrepreneurs are more talented at selling a dream than they are at executing on their goal… and that can spell disaster for investors. While the methods of making it happen vary greatly, ultimately, successful entrepreneurs win by continually executing on their goal. The intelligence, creativity and enthusiasm required are given components, but it’s the ability to take on seemingly impossible challenges, all while keeping a cool head and big smile, that sets this rare breed apart. It’s rare to find someone who has what it takes to build something from nothing. It’s nearly impossible to pinpoint, but successful venture capitalists know how to spot this winning combination of exceptional traits. I’m talking about entrepreneurs who possess the X factor. They’re extremely intelligent, a bit narcissistic and a force that won’t stop moving forward, no matter the obstacle. They’re outspoken, big thinkers, natural leaders and a bit unpredictable. What We Can Learn from the Theranos and WeWork Stories In it, Cody details the Theranos and WeWork stories. Today, we feature the latest issue of Venture Capital Digest from our private equity specialist, Cody Shirk. There was even media mogul Rupert Murdoch and the wealthy heirs to the founders of Amway, Walmart, and Cox Communication.Īnother company that underscores the necessity of due diligence in venture capital investing is WeWork, cofounded by Adam Neumann. They included some of venture capital’s biggest heavyweights, like Larry Ellison, Tim Draper, and Don Lucas. What’s crazy is how sophisticated her defrauded investors were. Last week, a jury found Elizabeth Holmes, the entrepreneur behind the biotech startup, Theranos, guilty of four counts of fraudulently deceiving investors.
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