{"id":19666,"date":"2022-09-15T06:00:00","date_gmt":"2022-09-15T11:00:00","guid":{"rendered":"https:\/\/theamericangenius.com\/housing\/?p=19666"},"modified":"2022-09-15T08:29:36","modified_gmt":"2022-09-15T13:29:36","slug":"a16z-350m-for-wework-co-founder-startup","status":"publish","type":"post","link":"https:\/\/theamericangenius.com\/housing\/real-estate-tech\/a16z-350m-for-wework-co-founder-startup\/","title":{"rendered":"a16z gives $350m to WeWork co-founder for startup, with a catch"},"content":{"rendered":"\n<p>\u201cIt\u2019s no trick to make a lot of money if all you want to do is make a lot of money.\u201d \u2014Citizen Kane Money is the name of the game in Venture Capital. And Marc Andreessen\u2019s a16z makes and invests a lot of money.<\/p>\n\n\n\n<p>a16z \u2019s new investment raised eyebrows across the financial world and in Hollywood as the company invested a record $350 million in <a href=\"https:\/\/www.flow.life\">Flow<\/a>, the brainchild of Adam Neumann of WeWork <a href=\"https:\/\/theamericangenius.com\/editorials\/wework-reality-check\/\">infamy.<\/a><\/p>\n\n\n\n<figure class=\"wp-block-embed is-type-wp-embed is-provider-the-american-genius wp-block-embed-the-american-genius\"><div class=\"wp-block-embed__wrapper\">\n<blockquote class=\"wp-embedded-content\" data-secret=\"zQYtsu65w6\"><a href=\"https:\/\/theamericangenius.com\/editorials\/wework-reality-check\/\">Reality check: WeWork can make mistakes, lose billions &#8211; you can&#8217;t<\/a><\/blockquote><iframe class=\"wp-embedded-content\" sandbox=\"allow-scripts\" security=\"restricted\" style=\"position: absolute; clip: rect(1px, 1px, 1px, 1px);\" title=\"&#8220;Reality check: WeWork can make mistakes, lose billions &#8211; you can&#8217;t&#8221; &#8212; The American Genius\" src=\"https:\/\/theamericangenius.com\/editorials\/wework-reality-check\/embed\/#?secret=IliHyOM0FD#?secret=zQYtsu65w6\" data-secret=\"zQYtsu65w6\" width=\"600\" height=\"338\" frameborder=\"0\" marginwidth=\"0\" marginheight=\"0\" scrolling=\"no\"><\/iframe>\n<\/div><\/figure>\n\n\n\n<p>Neumann &#8211; no stranger to making a lot of money himself &#8211; rose to fame in his WeWork quest for greatness followed by a <a href=\"https:\/\/www.bloomberg.com\/news\/articles\/2021-05-20\/wework-is-said-to-lose-2-1-billion-on-closings-neumann-deal\">crash and burn<\/a> when the financials didn\u2019t add up after an attempt to go public. WeWork\u2019s crash under Neumann is well documented as is the huge golden parachute deal he walked away with when asked to leave the company. Vanity Fair <a href=\"https:\/\/www.vanityfair.com\/hollywood\/2022\/04\/wecrashed-finale-adam-rebekah-neumann\">says<\/a> Neumann was given $480 million to leave WeWork.<\/p>\n\n\n\n<p>Now Neumann is back with Flow, <em>a company he says will change the face of rental property in cities around the US. <\/em>The need is there, he says, because today\u2019s market isn\u2019t friendly to entry-level home ownership, so making community property areas -apartments &#8211; appealing and friendly is the way of the future.<\/p>\n\n\n\n<p><a href=\"https:\/\/www.flow.life\">Flow<\/a> has not actually launched, but a16z \u2019s Andreessen believes in the company as envisioned by Neumann. <em>And Andreessen has often been right. <\/em>He invested in Airbnb, Facebook, Slack, and Instagram in their early stages. His company has ready cash to invest, and investing in Neumann is a gamble he\u2019s willing to take.<\/p>\n\n\n\n<p>\u201cAdam is a visionary leader who revolutionized the second largest asset class in the world \u2014 commercial real estate \u2014 by bringing community and brand to an industry in which neither existed before,\u201d Andreessen said in an explanatory blog <a href=\"https:\/\/a16z.com\/2022\/08\/15\/investing-in-flow\/\">post<\/a>. <\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\"><p>\u201cAdam, and the story of WeWork, have been exhaustively chronicled, analyzed, and fictionalized \u2013 sometimes accurately. For all the energy put into covering the story, it\u2019s often under appreciated that only one person has fundamentally redesigned the office experience and led a paradigm-changing global company in the process: Adam Neumann.\u201d<\/p><\/blockquote>\n\n\n\n<p>Neumann says he\u2019s learned lessons from his failure at the helm of WeWork. Now with Flow, Neumann says he wants to make renting a way to also build community, or what he calls \u201cConcept living.\u201d Financial Times <a href=\"https:\/\/www.ft.com\/content\/470dfd32-6bc6-47bc-bcec-edc4f11033d7\">called<\/a> Neumann\u2019s idea apartment rentals that sound like a student dorm for urban professionals.<\/p>\n\n\n\n<p>Neumann has spent millions of dollars buying rental apartment buildings in places such as Austin, Miami, and Nashville. He said walking through the apartments he saw great room to improve conditions making them more uplifting for tenants. His answer is a familiar one for him: community. <em>Andreessen saw the opportunity in that idea.<\/em><\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><img fetchpriority=\"high\" decoding=\"async\" width=\"1000\" height=\"667\" src=\"https:\/\/theamericangenius.com\/housing\/wp-content\/uploads\/sites\/2\/2022\/09\/a16z-andreessen-1.jpg\" alt=\"\" class=\"wp-image-19670\" srcset=\"https:\/\/theamericangenius.com\/housing\/wp-content\/uploads\/sites\/2\/2022\/09\/a16z-andreessen-1.jpg 1000w, https:\/\/theamericangenius.com\/housing\/wp-content\/uploads\/sites\/2\/2022\/09\/a16z-andreessen-1-300x200.jpg 300w, https:\/\/theamericangenius.com\/housing\/wp-content\/uploads\/sites\/2\/2022\/09\/a16z-andreessen-1-768x512.jpg 768w, https:\/\/theamericangenius.com\/housing\/wp-content\/uploads\/sites\/2\/2022\/09\/a16z-andreessen-1-600x400.jpg 600w\" sizes=\"(max-width: 1000px) 100vw, 1000px\" \/><\/figure>\n\n\n\n<p>\u201cShelter is one of our most basic needs,\u201d Andreessen states in the blog post. <\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\"><p>\u201cIn a world where limited access to homeownership continues to be a driving force behind inequality and anxiety, giving renters a sense of security, community, and genuine ownership has transformative power for our society. When you care for people at their home and provide them with a sense of physical and financial security, you empower them to do more and build things. Solving this problem is key to increasing opportunity for everyone.\u201d<\/p><\/blockquote>\n\n\n\n<p>The Financial Times article says two of the buildings Neumann has bought showcase the community he hopes to build. One in Nashville advertises a music room, a bark park, and a valet trash pick-up. The one in Florida lets tenants \u201clive the lifestyle they deserve\u201d with \u201crent-by-bedroom\u201d co-living, an outdoor cinema, and a \u201cbumpy lawn art area\u201d.<\/p>\n\n\n\n<p>Perhaps there\u2019s more to Flow &#8211; Andreessen seems to think so.<\/p>\n\n\n\n<p>\u201cOnly through a seismic shift in the way industry relationships are structured and the mechanisms through which value is delivered can we hope to address the underlying problems of the current system and build the solution,\u201d Andreessen stated in the blog post. <\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\"><p>\u201cDoing this requires combining community-driven, experience-centric service with the latest technology in a way that has never been done before to create a system where renters receive the benefits of owners. This means rethinking the entire value chain, from the way buildings are purchased and owned to the way residents interact with their buildings to the way value is distributed among stakeholders. And given the fragmented nature of the ecosystem today, we can only hope to accomplish any of this by bringing every aspect of the living experience together.\u201d<\/p><\/blockquote>\n\n\n\n<p>Where this goes is yet to be seen, especially since to date, Flow is a sort of website with a charismatic leader who knows how to sell a vision and has a net <a href=\"https:\/\/en.wikipedia.org\/wiki\/Adam_Neumann\">value<\/a> of $1.4 billion as of June 2022.<\/p>\n\n\n\n<p>Does this translate to home security for future renters in a nation where entry-level homeownership is more <a href=\"https:\/\/www.pbs.org\/newshour\/nation\/5-reasons-housing-is-so-expensive-right-now\">expensive<\/a> and less attainable than ever? <em>Not exactly.<\/em><\/p>\n\n\n\n<p>But that\u2019s not the point of Venture Capital investments. What is known for sure is the purpose of venture capital, and that\u2019s to make money. a16z sees the opportunity.<\/p>\n\n\n\n<p>As McKeever Conwell II, founder and managing partner at RareBreed Ventures, said in an <a href=\"https:\/\/www.theguardian.com\/business\/2022\/aug\/20\/adam-neumann-flow-wework-apartment-living\">article<\/a> in The Guardian, early investors in WeWork made a lot of money. And at the end of the day, Conwell said, <em>that\u2019s the point.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>WeWork co-founder, Adam Neumann, is getting a 2nd chance at startups with a loan for $350m from a16z, with a catch&#8230;<\/p>\n","protected":false},"author":337923,"featured_media":19667,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"wds_primary_category":0,"footnotes":"","jetpack_post_was_ever_published":false,"_links_to":"","_links_to_target":""},"categories":[93],"tags":[2386,2387,2131,1234,921],"class_list":["post-19666","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-real-estate-tech","tag-a16z","tag-flow","tag-real-estate-new","tag-real-estate-news","tag-wework"],"jetpack_featured_media_url":"https:\/\/theamericangenius.com\/housing\/wp-content\/uploads\/sites\/2\/2022\/09\/a16z-gives-350m-to-WeWork-co-founder-for-startup-with-a-catch.-WeWork-building-pictured.jpg","jetpack_sharing_enabled":true,"amp_enabled":true,"_links":{"self":[{"href":"https:\/\/theamericangenius.com\/housing\/wp-json\/wp\/v2\/posts\/19666","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/theamericangenius.com\/housing\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/theamericangenius.com\/housing\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/theamericangenius.com\/housing\/wp-json\/wp\/v2\/users\/337923"}],"replies":[{"embeddable":true,"href":"https:\/\/theamericangenius.com\/housing\/wp-json\/wp\/v2\/comments?post=19666"}],"version-history":[{"count":1,"href":"https:\/\/theamericangenius.com\/housing\/wp-json\/wp\/v2\/posts\/19666\/revisions"}],"predecessor-version":[{"id":19671,"href":"https:\/\/theamericangenius.com\/housing\/wp-json\/wp\/v2\/posts\/19666\/revisions\/19671"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/theamericangenius.com\/housing\/wp-json\/wp\/v2\/media\/19667"}],"wp:attachment":[{"href":"https:\/\/theamericangenius.com\/housing\/wp-json\/wp\/v2\/media?parent=19666"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/theamericangenius.com\/housing\/wp-json\/wp\/v2\/categories?post=19666"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/theamericangenius.com\/housing\/wp-json\/wp\/v2\/tags?post=19666"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}