Controversial WeWork founder Adam Neumann is raking in large quantities of investor money for his new actual property startup — however some enterprise capitalists are cringing on the comeback plan.
After information broke on Monday that Neumann’s new residential actual property startup, Movement, had raised a reported $350 million from outstanding enterprise capital agency Andreessen Horowitz at a valuation north of $1 billion, a number of tech buyers and founders reacted angrily.
“THIS IS DISGUSTING,” Kate Braddock, CEO of the startup Change and a normal accomplice on the W Fund, wrote on Twitter.
Braddock famous that the funding is the most important single examine in Andreessen Horowitz’s historical past — and slammed the funding agency for supporting a “straight white male” who’s the “founding father of one of the crucial poisonous firms we’ve seen.”
Andreessen Horowitz and Movement didn't reply to requests for remark.
The often outspoken Neumann has remained mum because the deal was introduced.
Earlier than Neumann give up his job as WeWork’s CEO in 2019, he reportedly fostered a “frat celebration” ambiance on the firm with frequent smoking and consuming in workplaces. The corporate was additionally hit with allegations that its workplace tradition fostered sexual harassment, which it denied.
Braddock mentioned that Andreessen Horowitz’s funding in Movement exhibits that the enterprise capital agency helps “perpetuate again and again a conventional system that favors a small, homogenous set of founders.”
Julia Austin, an angel investor and senior lecturer at Harvard Enterprise College, likewise wrote that the deal is a “robust sign from one of many world’s high buyers that unhealthy habits (by straight [white male]) isn't solely tolerated, however rewarded.”
Allison Byers, a tech investor and founding father of a startup known as Scroobius that appears to diversify tech, wrote that she was “clearly outraged” concerning the information.
“This can be a operate of how VC has developed to function,” Byers added in a LinkedIn put up. “Generational bias is in-built by the long-standing homogenous composition of decision-makers.”
Andreessen Horowitz co-founder Marc Andreessen nodded at Neumann’s previous in a weblog put up asserting the funding, writing, “We perceive how tough it's to construct one thing like this and we love seeing repeat-founders construct on previous successes by rising from classes discovered.”
“For Adam, the successes and classes are a lot and we're excited to go on this journey with him and his colleagues constructing the way forward for residing,” Andreessen added.
One other well-known tech investor, Jason Calacanis, floated the concept that Neumann’s new firm — which is ready to begin working subsequent yr — might be a nasty funding.
“If a startup is price $1b earlier than it launches a product it’s most likely a rip-off,” Calacanis wrote in response to a tweet concerning the funding.
After this story was printed on-line, Calacanis responded to an e-mail from The Submit and mentioned that he had religion in Neumann.
“If Adam opened a sizzling canine stand in Staten Island I'd make investments,” Calacanis mentioned. “I truly assume he has an 80% probability of creating this work since that is his ‘revenge startup.’
Nonetheless, Calacanis additionally mentioned that “giving any founder a ton of capital and [a $1 billion valuation] earlier than they've product/market match is at all times a mistake.”
Neumann infamously raised cash for WeWork at valuations as excessive as $47 billion in 2019. The corporate is price lower than $4 billion at the moment.
Particulars of his new mission are scarce, however Movement reportedly entails plans to create a “branded product with constant service and neighborhood options” for residential buildings in US cities, in accordance with the New York Instances. The corporate will reportedly supply its providers to landlords along with proudly owning some flats itself.
Neumann has already purchased up greater than 4,000 flats price greater than $1 billion in Miami, Fort Lauderdale, Atlanta, Nashville and different US cities, the Wall Avenue Journal reported in January.
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