Adam Neumann and Michael McKelvey built WeWork from a single floor into a billion-dollar startup, but Neumann's spending spree—private jets, a $6 million trademark on the word "We"—tanked the IPO. He resigned with a massive severance while the company needed $9.5 billion to stay alive.
In one year, WeWork went from being the highest valued startup ever to needing a $9.5 billion bailout. So what happened? It all starts in 2006 when these two guys, Adam Neumann and Michael McKelvey, were working out of this building in New York City. They noticed there's an entire floor of empty space and they see dollar signs, so they take over the floor and they start out renting out desks. 9 years later, they've built a co-working giant, WeWork, and they're heading towards an IPO. But that's a big problem because IPO means suddenly everyone can see what they're spending money on, and it turns out Neumann has been spending money like crazy. Private jets, investing in weird food companies, indoor wave pool manufacturers. He even privately trademarks the word "We" and sells it back to his own company for $6 million. So the execs call an emergency board meeting, investors pull their money out, Neumann and McKelvey are forced to resign, and even though the company is out of money, these guys still get millions in severance. So WeWork has to lay off thousands of employees and needs a $9.5 billion cash infusion just to stay afloat.
