Controversial WeWork founder Adam Neumann is raking in massive amounts of investor money for his latest real estate startup — but some enterprise capitalists are cringing on the comeback plan.
After news broke on Monday that Neumann’s latest residential real estate startup, Flow, had raised a reported $350 million from outstanding enterprise capital firm Andreessen Horowitz at a valuation north of $1 billion, several tech investors and founders reacted angrily.
“THIS IS DISGUSTING,” Kate Braddock, CEO of the startup Switch and a general partner on the W Fund, wrote on Twitter.
THIS IS DISGUSTING.@a16z’s largest check going to a (straight white male) founding father of probably the most toxic firms we’ve seen. Firms like this perpetuate over and once more a standard system that favors a small, homogenous set of founders. https://t.co/PLMKGIULqC
— Kate Brodock (@Just_Kate) August 15, 2022
Braddock noted that the investment is the most important single check in Andreessen Horowitz’s history — and slammed the investment firm for supporting a “straight white male” who’s the “founding father of probably the most toxic firms we’ve seen.”
Before Neumann quit his job as WeWork’s CEO in 2019, he reportedly fostered a “frat party” atmosphere at the corporate with frequent smoking and drinking in offices. The corporate was also hit with allegations that its office culture fostered sexual harassment.
Braddock said that Andreessen Horowitz’s investment in Flow shows that the enterprise capital firm helps “perpetuate over and once more a standard system that favors a small, homogenous set of founders.”
This isn’t nearly backing someone who’s a known quantity on the planet of toxic, unethical founders, it’s a powerful signal from certainly one of the world’s top investors that bad behavior (by straight WM) is just not only tolerated, but rewarded. Sigh. https://t.co/JQI1yg2BiR
— Julia Austin (@austinfish) August 15, 2022
Julia Austin, an angel investor and senior lecturer at Harvard Business School, likewise wrote that the deal is a “strong signal from certainly one of the world’s top investors that bad behavior (by straight [white male]) is just not only tolerated, but rewarded.”
Allison Byers, a tech investor and founding father of a startup called Scroobius that appears to diversify tech, wrote that she was “obviously outraged” in regards to the news.
“This can be a function of how VC has evolved to operate,” Byers added in a LinkedIn post. “Generational bias is inbuilt by the long-standing homogenous composition of decision-makers.”
Andreessen Horowitz co-founder Marc Andreessen nodded at Neumann’s past in a blog post announcing the investment, writing, “We understand how difficult it’s to construct something like this and we love seeing repeat-founders construct on past successes by growing from lessons learned.”
“For Adam, the successes and lessons are plenty and we’re excited to go on this journey with him and his colleagues constructing the long run of living,” Andreessen added.
Marc Andreessen’s said of Neumann that he loves “seeing repeat-founders construct on past successes.” Steve Jennings
One other well-known tech investor, Jason Calacanis, floated the concept Neumann’s latest company — which is about to begin operating next 12 months — may very well be a foul investment.
“If a startup is value $1b before it launches a product it’s probably a scam,” Calacanis wrote in response to a tweet in regards to the investment.
Neumann infamously raised money for WeWork at valuations as high as $47 billion in 2019. The corporate is value lower than $4 billion today.
If a startup is value $1b before it launches a product it’s probably a scam.
— firstname.lastname@example.org (@Jason) August 15, 2022
Details of his latest project are scarce, but Flow reportedly involves plans to create a “branded product with consistent service and community features” for residential buildings in US cities, in keeping with the Latest York Times. The corporate will reportedly offer its services to landlords along with owning some apartments itself.
Neumann has already bought up greater than 4,000 apartments value greater than $1 billion in Miami, Fort Lauderdale, Atlanta, Nashville and other US cities, the Wall Street Journal reported in January.
Andreessen Horowitz didn’t reply to requests for comment, while Neumann couldn’t be directly reached. An inquiry sent to a different certainly one of this firms, Flow Carbon, didn’t receive a response.