The career rise, fall, and attempted return of Adam Neumann, the controversial WeWork cofounder whose former company just filed for bankruptcy

wework adam neumann 4 4x3
Neumann said he hasn't been involved with WeWork since 2019 when he stepped down from the CEO role.WeWork; Eduardo Munoz/REUTERS; Samantha Lee/Business Insider
  • Adam Neumann ran WeWork for nearly a decade, but his role came to an abrupt end in late 2019.

  • Neumann announced in 2019 he was stepping down as CEO.

  • WeWork filed for Chapter 11 bankruptcy on Monday after struggling to fill offices.

Adam Neumann, 43, was born in Israel in 1979. His parents got divorced when he was 7, and he moved around a lot as a child with his mother — he reportedly lived in 13 different homes by the time he was 22.

Lior Mizrahi/Getty Images

Source: New York Magazine

As a child, Neumann lived for some time on an Israeli kibbutz, one of the collective community settlements across the country. Neumann attended school near the Gaza Strip while his mother worked as a doctor at a nearby hospital.

kibbutz nir am israel
Kibbutz Nir Am, where Neumann lived as a child.Reuters/Amir Cohen

Source: Haaretz

Neumann is severely dyslexic, and couldn't read or write until he was in third grade.

Adam Neumann
Jackal Pan / Getty

Source: Forbes

As is customary for Israeli citizens, Neumann served in the Israel Defense Forces after grade school. He served in the navy for five years, although only three years of service is required. "That’s where I got to know a lot of my best friends," Neumann told Haaretz in 2017.

israel defense force
Israel Defense Forces via creative commons

Source: Haaretz

After leaving the IDF, Neumann moved in 2001 to New York City, where he lived in a Tribeca apartment with his sister Adi. He spent his early days in New York going to clubs and “hitting on every girl in the city,” he said in a commencement speech in 2017.

tribeca nyc
Katie Warren/Business Insider

Source: New York Magazine

Neumann enrolled at city school Baruch College in January 2002 and majored in business. He said he thought of the concept of WeLive, WeWork's communal living business, for a school entrepreneurship competition. However, the idea was killed in the competition's second round, because a professor didn't think Neumann would be able to raise enough money "to change the way people live."

baruch college
Reuters/Carlo Allegri

Sources: New York Magazine, TechCrunch

Neumann dropped out from college just four credits shy of graduating. He ultimately finished his degree 15 years later, in 2017, after completing a four-month independent study, and delivered the commencement speech for Baruch College's graduating class.

adam neumann commencement speech baruch college
Neumann delivering his Baruch College commencement speech in 2017.WeWork/YouTube

Sources: TechCrunch, Business Insider

While in college, Neumann met his now-wife, Rebekah Paltrow Neumann, who is a cousin of actress Gwyneth Paltrow. The pair got married in 2009, and now have five children together.

adam and rebekah neumann
Adam Neumann and his wife, Rebekah Paltrow Neumann.Theo Wargo/Getty Images

Source: Observer, Real Deal

On their first date, Paltrow Neumann called out the WeWork cofounder for being "full of s---." Neumann credits his wife for getting him to stop smoking, and for telling him to pursue his passions instead of dreams to be rich.

WeWork Adam Neumann and Rebekah Paltrow Neumann
WeWork husband/wife team Rebekah Paltrow Neumann and Adam Neumann.Fortune

Sources: Business Insider, Business Insider

Paltrow Neumann became the founder and CEO of WeGrow, the business under the WeWork company umbrella that operated an elementary school in New York before shutting down in 2019. She was a WeWork founding partner, when she learned there's "no job too big or too small for each person."

adam Rebekah Neumann
Evan Agostini/Invision/AP

Sources: Coveteur, WeGrow

Read more: WeWork is just one of the businesses owned by the $47 billion company that just filed for its IPO — check out the full list

While Neumann was at college, he worked on two business ventures: a failed idea for collapsible heeled shoe, and baby clothes with built-in knee-pads called Krawlers. He dropped out to pursue the second idea, and developed it into a baby-clothing company called Egg Baby in 2006.

adam neumann wework
Adam Neumann, chief executive officer of U.S. co-working firm WeWork, speaks during a signing ceremony in Shanghai, China April 12, 2018.Jackal Pan/Reuters

Sources: Forbes, TechCrunch

Egg Baby is still around today as a luxury baby clothing company headed up by clothes designer Suzan Lazar. Neumann is no longer involved in the day-to-day operations of Egg Baby, whose children's clothing is sold at department stores around the world.

baby crawling
AP Photo/Chitose Suzuki

Sources: Forbes, TechCrunch

Soon after launching Egg Baby, Neumann met WeWork cofounder Miguel McKelvey through a mutual friend. The two reportedly bonded over their backgrounds and competitive streaks, and McKelvey convinced Neumann to move Egg Baby offices to the same building he was working out of in Brooklyn.

miguel mckelvey adam neumann cofounders wework
Miguel McKelvey, left, and Adam Neumann.Scott Legato/Getty

Source: Forbes, New York Magazine

Soon after, the two developed the idea for WeWork after brainstorming an idea for renting out empty office space to other companies. In 2008, they convinced their building's landlord to let them rent out a floor in a nearby Brooklyn building, and an earth-friendly co-working company called Green Desk was born.

Miguel McKelvey and Adam Neumann WeWork
Miguel McKelvey and Adam Neumann discuss WeWork at IGNITION 2016.Business Insider

Sources: Forbes, New York Magazine

However, McKelvey and Neumann decided to go off on their own. They sold off their share of Green Desk to their landlord for $3 million, and opened their first WeWork space in 2010 in New York's Little Italy neighborhood.

Original WeWork Building 154 Grand St Soho
The first WeWork building at the corner of Grand and Lafayette streets in New York City.Original WeWork Building at 154 Grand Street in NYC's SoHo.

Sources: Forbes, New York Magazine

Under Neumann as CEO, WeWork expanded to provide co-working desk space in commercial buildings in more than 120 cities in nearly 40 countries. The company was valued at $47 billion.

adam neumann wework we company ceo
Adam Neumann, CEO of The We Company.AP Photo/Mark Lennihan

Sources: Business Insider, Forbes

Paige Leskin contributed earlier reporting to this story.

One of WeWork's biggest investors is the Japanese investment firm SoftBank, who has invested more than $10 billion in the company. Neumann has told Business Insider about his close relationship with SoftBank CEO Masayoshi Son, who he calls "Yoda."

Masayoshi Son
SoftBank CEO Masayoshi Son.Getty Images AsiaPac

Source: Business Insider

Neumann himself was worth an estimated $4 billion at his peak. After founding WeWork, Neumann spent over $80 million on five homes, including two properties in New York City and one home in the Hamptons. In 2018, he reportedly purchased a 13,000-square-foot home in the San Francisco area, complete with a guitar-shaped room, worth $21 million.

Adam Neumann

Sources: Wall Street Journal, Business Insider

Neumann also invested in a number of startups, both by himself and on behalf of WeWork. His niche-interest investments included a wave-pool maker, a medical marijuana provider, and a superfood startup, which sells things like "performance mushrooms," powdered coconut water infused with beets and turmeric, and highly caffeinated coffee.

adam neumann wework we company ceo
Adam Neumann, CEO of The We Company.AP Photo/Mark Lennihan

Source: Business Insider

Neumann was WeWork's largest single shareholder. However, he cashed out some of his stake and took out loans. In total, Neumann's sales and debt transactions reportedly totaled $700 million.

Adam Neumann
Getty Images

Source: Business Insider

The company publicly filed for an IPO on August 14, 2019. The IPO filing gave the public its best view yet at the company's money-losing financials: notably, $1.6 billion in losses on $1.8 billion in revenue in 2018.

Adam Neumann WeWork Presents The San Francisco Creator Awards At The Palace of Fine Arts Theatre
Kelly Sullivan/Getty Images

Business Insider's Troy Wolverton and Shona Ghosh wrote in their coverage of WeWork's S-1 that:

"The numbers show spiraling losses over the last three years:

  • During the year December 31, 2016, WeWork lost $429 million on $436 million in revenue.

  • The following year that loss increased to $890 million on $886 million in revenue.

  • And for the full year 2018, WeWork lost $1.6 billion on $1.8 billion in revenue.

  • For the first six months of 2019, the firm posted a loss of $690 million on $1.5 billion in revenue.

We Co. will be the most highly valued startup to go public since Uber in May."

However, along with WeWork's IPO paperwork came further scrutiny of its business. The filings showed that WeWork paid Neumann just shy of $6 million for the trademark rights for the "we" family trademarks for the company's name change to the We Company in January 2019. After widespread criticism, Neumann paid the money back.

we company wework rebrand
The We Company

Source: Business Insider

The IPO paperwork also revealed a number of Neumann's potential conflicts of interest regarding WeWork. Neumann was revealed to have personal financial ties to WeWork buildings, and his wife, Rebekah, was listed as one of three people who would decide the next CEO if Neumann could no longer run the company. WeWork limited her power by removing her ability to help choose the next CEO, and also banned her and any of Neumann's family members from serving on the board.

Adam Rebekah Neumann
Rebekah and Adam Neumann.Ben Hider/Getty Images

Source: Business Insider

Shortly after the IPO was filed, a report revealed that WeWork had been bleeding human resources managers, and some pointed fingers at Neumann himself as the reason. Neumann reportedly criticized some employees as "B players" behind their backs.

adam neumann
Jackal Pan/Getty Images

Source: Business Insider

The IPO paperwork also showed that Neumann had special shares in WeWork that gave him a massive 20 votes per share, as well as majority control over the company. His power was limited in WeWork's amended IPO filing in September 2019, in which the company slashed its valuation from $47 billion to below $20 billion.

Adam Neumann
WeWork Cos. co-founder Adam NeumannFortune Brainstorm

Sources: Business Insider, Business Insider

In September 2019, a Wall Street Journal report detailed Neumann's hard-partying ways, and drug and alcohol use. Two of the most startling revelations in the piece: Once after announcing layoffs, Neumann sent around tequila shots and organized a surprise Run-DMC concert. Also, his private jet was once recalled in Israel after marijuana was found hidden in an onboard cereal box.

Adam Neumann
We cofounder and CEO Adam NeumannGetty

Source: Wall Street Journal

Amidst the criticism, Neumann's leadership of WeWork was thrown into question. WeWork's board of directors met in September 2019 to discuss the possibility of removing Neumann as CEO — something reportedly backed by one of Neumann's best assets, SoftBank head Masayoshi Son.

masayoshi son
SoftBank Group Corp. Chairman and CEO Masayoshi Son.Tomohiro Ohsumi/Getty Images

Source: Business Insider

On September 24, Neumann said he would be stepping down from his role as WeWork CEO. Neumann said in a statement that he had become a "significant distraction" in recent weeks, and it was in the company's "best interest" to resign. Two WeWork executives — Sebastian Gunningham and Artie Minson — took his place as co-CEOs. The company then withdrew its S-1 filing, officially postponing its IPO.

Artie Minson (left) and Sebastian Gunningham, WeWork CEOs
Artie Minson (left) and Sebastian Gunningham, WeWork temporary CEOs.We Company; Samantha Lee/Business Insider

Source: Business Insider

Neumann put at least two of his properties up for sale. Both his three-floor New York City penthouse and Hamptons house were put on the market. His Hamptons house sold for $1.25 million in March 2020.

adam neumann 78 irving place nyc apartment
Neumann's penthouse at 78 Irving Place.Compass

Source: Business Insider, Mansion Global

Neumann momentarily kept his role as chairman of WeWork's board of directors, but he stepped down from the board in October 2019. SoftBank, WeWork's largest investor, was given control of the company as part of a $9.5 billion bailout plan. As part of the buyout deal, SoftBank planned to provide Neumann with a $1.7 billion exit package.

wework adam neumann 4 4x3
Neumann said he hasn't been involved with WeWork since 2019 when he stepped down from the CEO role.WeWork; Eduardo Munoz/REUTERS; Samantha Lee/Business Insider

Source: Wall Street Journal, Business Insider

However, SoftBank announced in April it would not be going through with a big part of its WeWork bailout package. SoftBank had planned to purchase $3 billion worth of shares from investors and employees — including shares from Neumann worth $970 million — but backed out, citing "multiple, new, and significant" civil and criminal investigations into WeWork.

Marcelo Claure wework 2x1-3
WeWork chairman Marcelo Claure.Riccardo Savi/Getty Images; Xinhua/Pei Xin via Getty Images; Ruobing Su/Business Insider

Source: Business Insider

After not speaking publicly for two years, Neumann sat down for an interview with Andrew Ross Sorkin in November 2021. He was asked about the thousands of employees who lost their jobs, how much money he walked away with after leaving WeWork, and selling the "we" family trademarks.

adam neumann wework
Jackal Pan/Visual China Group via Getty Images

Source: Business Insider

Neumann said he had regrets about WeWork's drop from a $47 billion valuation to $7 billion after the company's attempt to IPO. But he didn't apologize to employees who lost their jobs, and whose stock options lost value while he left the company with $180 million from SoftBank, WeWork's largest investor.

A screengrab from "WeCrashed" (left) and Adam Neumann (right)
AppleTV+; Michael Kovac/Getty Images for WeWork

Source: Business Insider

Neumann got back in the startup game in 2022 with a rental-housing company called Flow. Andreessen Horowitz, or A16z, invested $350 million into the startup — the firm's largest single investment ever.

adam neumann
Jackal Pan/Visual China Group via Getty Images

Source: Business Insider

Flow was valued at $1 billion in 2022, and Neumann spent over $1 billion last year purchasing 3,000 housing units for the startup.

Miami, Florida
Miami, FLSylvain Sonnet/Getty Images

A contributing factor in Neumann's downfall from WeWork was leasing office properties he owned back to WeWork. Flow is operating in the properties owned by Neumann. The units are in Atlanta, Nashville, Tennessee, Fort Lauderdale, and Miami.

Source: Business Insider

Although Flow's full business operation is not clear, the startup seems to be focused on creating community and wants to solve the undersupply of housing in the US, and give renters the ability to build equity despite not being able to afford a house.

Housing stock photo
David Jay Zimmerman

Source: Business Insider

Marc Andreessen, cofounder of A16z, sits on Flow's board. Andreessen said in 2022 he was "immensely against multifamily development," in the suburb he lives in Atherton, California.

Marc Andreessen smiles during a conference panel.
Marc Andreessen is among the biggest defenders of the prospects of Web3.Justin Sullivan/Getty Images

Source: Business Insider

A16z previously invested in FlowCarbon, Neumann's crypto startup for tokenizing carbon credits and allowing renewable-energy developers to trade those tokens. In a round led by A16z, the startup raised $32 million.

marc andreesen a16z
Justin Sullivan/Getty Images

Source: Business Insider

At a conference arranged by A16z, Neumann said Flow tenants will want to plunge their own toilets because they'll feel ownership over their apartment.

Adam Neumann
Adam NeumannAdam Neumann

Neumann said at the conference in February 2023 that he wants Flow residents to "feel ownership" and that they're "part of something" because he thinks people who feel ownership will live in the apartments longer, leading to more profit.

"If you're in an apartment building and you're a renter and your toilet gets clogged, you call the super," Neumann said. "If you're in your own apartment, and you bought it and you own it and your toilet gets clogged, you take the plunger."

Source: Business Insider

In October 2023 he condemned Hamas' attack on Israel and the loss of innocent lives in both Palestine and Israel during the ongoing conflict.

Israeli flag
Europa Press News/Getty Images

Source: CNBC

Less than a month before WeWork would file for bankruptcy, Neumann looked back fondly on the "unbelievable team" at the company and said it was hard to watch the company struggle from the sidelines.

WeWork cofounder Adam Neumann
Shahar Azran/Getty Images

Source: CNBC

After WeWork filed for bankruptcy on November 6, Neumann released a statement expressing his disappointment with the filing and the company's failure to "take advantage of a product that is more relevant today than ever before."

WeWork building
NurPhoto/Getty Images

"As the co-founder of WeWork who spent a decade building the business with an amazing team of mission-driven people, the company's anticipated bankruptcy filing is disappointing," said Neumann in a statement on Monday.

"It has been challenging for me to watch from the sidelines since 2019 as WeWork has failed to take advantage of a product that is more relevant today than ever before. I believe that, with the right strategy and team, a reorganization will enable WeWork to emerge successfully," he added.

Source: Business Insider

Correction: November 10, 2023 — An earlier version of this story misstated the status of FlowCarbon. A company representative says FlowCarbon is growing in staff and actively conducting transactions.


Read the original article on Business Insider