Ben Horowitz Explains Investment in Adam Neumann After WeWork Woes

In 2019, Adam Neumann stepped down as WeWork’s CEO after a failed IPO raised questions about his leadership and spending. Three years later, Andreessen Horowitz wrote him a check for a reported $350 million.

A swift backlash followed after A16z announced the investment. Jason Calacanis posted on X that a startup “worth $1b before it launches a product it’s probably a scam.”

On “Lenny’s Podcast,” Ben Horowitz explained why A16z invested in Neumann’s real estate startup, Flow, calling it “the single most controversial investment that we ever made.”

“We got called everything from stupid to sexist to racist to this and that for literally just funding Adam,” Horowitz said. “I think it’s going to end up being one of the best investments we ever made. He’s doing a phenomenal job there.”

Flow seeks to do for apartment dwellers what WeWork did for workers — creating spaces that welcome community through branding and perks.

Horowitz explained that investing in Neumann reflects a common principle at A16z: “You don’t judge a person by the worst thing that ever happened to them.”

“We’ve all had bad things happen to us,” Horowitz said. “We’ve all made bad decisions. Most of them, they don’t make a miniseries about, right?”

The miniseries “WeCrashed,” which tells the story of WeWork’s rise and fall, debuted in March 2022 — five months before A16z announced its investment. Jared Leto played Neumann, and Anne Hathaway played his wife, Rebekah.

A16z has backed other founders with controversial pasts, including Munjal Shah, whose prior startup made headlines when it filed for bankruptcy in 2023. The venture capital firm also hired Daniel Penny, the Marine veteran acquitted in the subway killing of homeless street performer Jordan Neely.

Horowitz acknowledged Neumann’s history at WeWork: “If you really unravel the things that went wrong, most of it was a combination of inexperience and nobody around him that would tell him the truth.”

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“Maybe he wasn’t good at listening to the truth either at the time,” Horowitz said.

But that’s not a good reason to give up on a visionary, he said, especially one who built a commercial real estate brand that “everybody knows.”

While WeWork is still operating, it is significantly reduced in size and lost the majority of its leadership team after the failed IPO and resulting bailout by Softbank, which pumped billions into the company. WeWork filed for bankruptcy in 2023, and was cleared to exit a year later.

In an interview two years after his ousting, Neumann said there had been “multiple lessons and multiple regrets.” He said that WeWork’s $47 million valuation went to his head.

Horowitz credited his partner Marc Andreessen for making the first move. Andreessen was the first one to call Neumann and ask what he was up to, Horowitz said.

“That’s probably the biggest secret there,” he said. “Judge people on what they can do. Coach people on what they can do. Help them take their strengths and use them, as opposed to overfocus[ing] on their weaknesses.”