Startup WeWork's cofounder got richer. But its employees lost out | Hacker News Reader

Startup WeWork's cofounder got richer. But its employees lost out

17 pointsadelHBN3 comments

Thanks to SoftBank, WeWork's cofounder, Adam Neumann, is now $1.7B richer. As an entrepreneur, this is a great personal story for him and his family, and perhaps inspirational to other entrepreneurs. But what about WeWork's employees? Doesn't what's happening to those employees undermine the excitement of working for a startup?

Aside from the fact that thousands are slated to be laid off, the equity compensation of employees has virtually been wiped out. Briefly, this is what I know per my review of the news: In January 2019 WeWork's vaulting valuation was $47B. As of this week, that valuation has plummeted to $8B. Based on this week's deal, SoftBank now owns 80% of WeWork, which means that most WeWork's employees' stock options are now underwater (at $20-a-share according to WSJ).

So some of the winners here are Mr. Neumann, SoftBank and some early investors such as JPM's asset management division and VCs such as Benchmark Capital. If anyone has more details about the winners and losers of WeWork's deal, please share.

In my opinion being a startup employee comes with a great risk of being laid off at one point or another. Over 95% of startups go out of "business", right? WeWork case is spectacular, because of it's valuation and money involved.

It's not really on topic, but it's a warning message to the youngest employees of startups, if you see a fire, you can be pretty much sure it's gonna turn into a big flame that's gonna end up hurting you one way or another. At that point, you really have to think if it's not better to change a job.

My question was posed in the context of the disparity of what happened to the employees versus the founder at WeWork. Startup employees rightfully assume that the fate of their shares and those of the founders are tide - that if the company does well, they all proportionally do well, and if the company's fortunes diminish, well then everyone, including the founders, share that ill fate. In this case, the founder came out spectacularly well but the employees suffered. That's the issue.

1 - Did the employees got their salary?

It seems likely that yes.

2 - Did the employees were forced to work for WeWork?

It seems likely not.

WeWork StartUp was a Success a VERY good success for its founders.

Indeed we all should take notes because most of the time, we see VCs getting the better deal and the founders/owners small scraps.

People seem to forget that RISK is a function of "capitalism," and when you join a company expecting your stock options value goes higher, and you put up with non-sense, that is a risk.

It did pay for googlers, msfters, and others.

Will your outrage be still in place if:

"Adam sold his company for 1.7B$ to <big name>" and then one year later:

"<big name> is laying off xxx employees on its <legacy fake name> division.

It may sound harsh, but there is a lot of employees that I know were bragging about WeWork going BIG and BAM. BIG BUCKS BABY

My current work is a risk too. Tomorrow my boss can say "sorry, we don't need you anymore."

Good luck for us all and that we may find wealth and happiness.

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