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Comment by djbusby | Hacker News Reader

What? That seems...odd?

I had to look myself, from wikipedia: "As CEO, Neumann, on multiple occasions purchased buildings and then leased the space back to WeWork.[60] Observers noted this as a potential conflict of interest and one that would not be allowed if WeWork were a public company.[61] During his tenure as CEO of WeWork, Neumann also purchased US$90 million worth of residences, including a 60-acre (24 ha) estate in Westchester County, New York, a 6,000-square-foot (560 m2) condominium near Gramercy Park, two homes in The Hamptons, and a US$21 million mansion in Corte Madera, California.[16]

Neumann launched Flow, a residential real estate startup funded by the venture capital firm Andreessen Horowitz, in August 2022." (https://en.wikipedia.org/wiki/Adam_Neumann)"

This guy is just a greed engine at full steam!

Its astonishing that Adam Newumann was able to raise hundreds of millions for Flow after all he did at WeWork. At this point you wonder, if VCs are also complacent in these scams. Are they together in scamming the LPs?

Given a16z's presence in crypto, I reckon so.

Although to be fair, they seemed to be interested in scamming true crypto believers in that space, more than their partners, they'd get a bunch of shitcoins in the ICO and then offload them asap.

Not LPs, but later stage VCs and private equity. It’s a game of musical chairs, you just need to be early in. And A16Z are experts in this, with all their investments in crypto. Def not great for their rep and I’d never raise from them because of this btw.

a16z viewed Neumann very positively, to the point that they asked potential CEOs what they thought of Neumann, and the "correct" answer was to be empathetic that he took a huge swing of the bat.

If that's true, then it's kinda gross tbh.

What's their advice to Neumann this time?

"I hope you are more discreet this time so your scam lasts long enough for us to exit"???

This article elaborates on it: https://www.businessinsider.com/interview-venture-capital-jo...

> A candidate who displayed empathy for the entrepreneur would answer the question about Neumann with something like the following, Horowitz said: "He did an unbelievable thing in that he built something that almost nobody has done, which is he built a consumer brand in commercial real estate." The person might add, "He told that story so beautifully that he was able to raise a gigantic amount of money and fund this incredible growing operation."

I mean, Ben Horowitz is correct here. In a VC interview context, crapping on Adam Neumann is boring and zero information value which is a negative signal. Being able to fairly evaluate people you have strong emotions for, positive or negative is a key VC trait.

I somehow think that Horowitz wouldn't want to hear my honest evaluation of Adam Neumann: He found a set of idiots with money (chiefly Andreesen Horowitz and Softbank) and saw them making dumb trades, so he found a way to put himself on the other side of those trades. To do this, he constructed an "audacious" but ultimately fundamentally dumb business that he could wrap in VC shibboleths, whose principal goal was to collect VC money and funnel it into his pocket. In a way, he is a brilliant exploiter of people like Horowitz.

I mean, if he fails his own test, that’s his problem but the test is the correct one.

Agreed. Anyone can create a company which raises a ton of money and feeds 90% of it back to itself as revenue.

I don't think that anyone can do this, at all. I think there's a totally different skillset that it takes to actually run a business than to get money from VCs, and by stripping away the need for the running-a-business skillset, Adam Neumann really perfected his VC grift game. That doesn't mean that he wasn't exceptionally skilled at it.

I’m not sure the evaluation above is “fair”. “Positive” would be a better term

People never like to be told they’re mugs

I suspect it’s more self-serving and they just want to weed out people that would have moral qualms about making gobs of money with a white elephant.

But IS this a fair valuation? Was his glamour and charisma really all there was to it?

> Its astonishing that Adam Newumann was able to raise hundreds of millions for Flow after all he did at WeWork

I'm not astonished: WeWork made VCs lots of money - not counting SoftBank as they were the unsophisticated marks/bag holders.

I'm fairly sure Vision Fund is just a money laundering operation. It takes talent to have such an unbroken record of investment failure.

More than complacent, complicit.

This was a big part of the controversy that scuttled their 2019 IPO plan and ousted Neumann from WeWork leadership, along with the toxic workplace accusations and other...volatile things associated with Neumann.

It’s odd, but he convinced Vision Fund to go along with this. It’s a clever grift, if it’s legal.

It’s not self dealing if you really love the building I guess. To be fair it was a matter of time before somebody loaded them up with debt and wiped equity. Might as well do it yourself.

> It’s not self dealing if you really love the building

It’s not self dealing if everyone is on the same page. Neumann didn’t hide any of this. From SoftBank. From the public.

If a company tanks right after being listed on the public markets -- that is, right after insiders got an opportunity to dump their shares on less informed investors -- most likely a serious financial crime has taken place. A real business doesn't go from a 47bn market cap to zero in ~2 years. It's not sufficient to make generic disclosures to investors that there are substantial risks and that you have an unproven business model and such. If it looks, talks, and walks like a pump & dump scheme it probably is.

It's totally still self dealing. It just avoids being fraud.

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