Wij willen met u aan tafel zitten en in een openhartig gesprek uitvinden welke uitdagingen en vragen er bij u spelen om zo, gezamelijk, tot een beste oplossing te komen. Oftewel, hoe kan de techniek u ondersteunen in plaats van dat u de techniek moet ondersteunen.

The Wall Street Journal is reporting that SoftBank Group is using regulatory investigations as a way to back out of its commitment to buy $ 3 billion in shares from existing WeWork shareholders.

WeWork’s spectacular train wreck of an initial public offering was an early harbinger that the good times might be over for a cohort of later-stage investments valued at multiple billions of dollars. And the buyout package was part of a broader effort by SoftBank to work out some of the issues at the most troubled company in its broad portfolio of high-priced, highly valued private startups.

Among those who would be left out of a potential buyback plan is WeWork’s founder and former chief executive, Adam Neumann, who was set to receive up to $ 970 million for his shares in the co-working company.

Citing a notice sent to WeWork shareholders, the Journal reported that if SoftBank reneged on the buyback, it would not go back on its commitment to give the office sharing company a $ 5 billion lifeline.

According to the Journal’s reporting, the deal to buy back shares isn’t canceled, and could just be an effort to renegotiate terms in light of the global economic slowdown caused by the world’s response to the coronavirus pandemic.

So far, the SEC and the Justice Department, along with New York state regulators, have asked for information from SoftBank about WeWork’s business practices and communications to investors.


TechCrunch

Yesterday, we had a chance to talk with longtime venture investor Brad Feld of Foundry Group, whose book “Venture Deals” was recently republished for the fourth time, and for good reason. It’s a storehouse of knowledge, from how venture funds really work to term sheet terms, from negotiation tactics to how to choose (and pay for) the right investment banker.

Feld was generous with his time and his advice to founders, many dozens of whom had dialed in, conference-call style. In fact, you can find a full transcript of our conversation right here if you’re a member of Extra Crunch.

In the meantime, we thought we’d highlight some of our favorite parts of the conversation. One of these touches on SoftBank, an organization that Feld knows a little better than many other investors. We also discussed what happened at WeWork and specifically the difference between a cult-like leader and a visionary — and why it’s not always clear right away whether a founder is one or the other.  These excerpts have been edited for length and clarity.

TC: We were just talking about startups raising too much money, and speaking of which, you were involved with SoftBank long ago. Your software company had raised capital from SoftBank, then you later worked for the company as an investor. This way predates the Vision Fund, but you did know Masayoshi Son, which makes me wonder: what do you think of how they’ve been investing their capital?

BF: Just for factual reference, I was initially affiliated with SoftBank with a couple of other VCs; Fred Wilson, Rich Levandov and at the time Jerry Colonna, who now runs a company called Reboot. During that period of time, a subset of us ended up starting a fund that eventually became called Mobius Venture Capital, but it was originally called SoftBank Venture Capital or SoftBank Technology Ventures. We were essentially a fund sponsored by SoftBank, so we had SoftBank money. The partners ran the fund, but we were a central part of the SoftBank ecosystem at the time. I’d say that was probably ’95, ’96 to ’99, 2000. We changed the name of the firm to Mobius in 2001 because it was endlessly getting confused with the other [SoftBank] fund activity.

I do know a handful of the senior principals at SoftBank today very well, and I have enormous respect for them. Ron Fisher [the vice chairman of SoftBank Group] is the person I’m closest to. I have enormous respect for Ron. He’s one of my mentors and somebody I have enormous affection for.

There are endless piles of ink spilled on SoftBank, and there are loads of perspectives on Masa and about the Vision Fund. I would make the observation that the biggest dissonance in everything that’s talked about is timeframe, because even in the 1990s, Masa was talking about a 300-year vision. Whether you take it literally or figuratively, one of Masa’s powers is this incredible long arc that he operates on. Yet the analysis that we have on a continual basis externally is very short term — it’s days, weeks, months.

What Masa and the Vision Fund conceptually are playing is a very, very long-term game. Is the strategy an effective strategy? I have no idea . . .  but when you start being a VC, it takes a long time to know whether you’re any good at it out or not. It takes maybe a decade really before you actually know. You get a signal in five or six years. The Vision Fund is very young . . . It’s [also] a different strategy than any strategy that’s ever been executed before at that magnitude, so it will take a while to know whether it’s a success or not. One of the things that could cause that success to be inhibited would be having too short a view on it.

If a brand-new VC or a brand new fund is measured two years in in terms of its performance, and investors look at that and that’s how they decide what to do with the VC going forward, there would be no VCs. They’d all be out of business because the first two years of a brand-new VC, with very few exceptions, is usually a time period that it’s completely indeterminate as to whether or not they’re going to be successful.

TC: So many funds — not just the Vision Fund — are deploying their funds in two years, where it used to be four or five years, that it’s a bit harder. When you deploy all your capital, you then need to raise funding and it’s [too soon] to know how your bets are going to play out.

BF: One comment on that, Connie, because I think it’s a really good one: When I started, in the ’90s, it used to be a five-year fund cycle, which is why most LP docs have a five-year commitment period for VC funds. You literally have five years to commit the capital. In the internet bubble, it’s shortened to about three years, and in some cases it shortened to 12 months. At Mobius, we raised a fund in 1999 and a fund in 2000, so we had the experience of that compression.

When we set out the raise Foundry, we decided that our fund cycle would be three years and we would be really disciplined about that. We had a model for how we were going to deploy capital from each of our funds over that period of time. It turned out that when we look back in hindsight, we raised a new fund every three years and eventually we lost a year in that cycle. We have a 2016 vintage and a 2018 vintage and it’s because we really deployed the capital over 2.75 to three years . . .It eventually caught up with us.

I think the discipline of trying to have time diversity against the capital that you have is super important. If you talk to LPs today, there is a lot of anxiety about the increased pace at which funds have been deployed, and there has been a two year cycle in the last kind of two iterations of this. I think you’re going to start seeing that stretch back out to three years. From a time diversity perspective three years is plenty [of time] against portfolio construction. When it gets shorter, you actually don’t get enough time diversity in the portfolio and it starts to inhibit you.

TC: Very separately, you wrote a post about WeWork where you used the term cult of personality. For those who didn’t read that post — even for those who did — could you explain what you were saying?

BF: What I tried to abstract was the separation between cults of personality and thought leadership. Thought leadership is incredibly important. I think it’s important for entrepreneurs. I think it’s important for CEOs. I think it’s important for leaders, and I think it’s important for people around the system.

I’m a participant in the system, right? I’m a VC. There are lots of different ways for me to contribute, and I think personally, rather than creating a cult of personality around myself, as a contribution factor, I think it’s much better to try to provide thought leadership, including running lots of experiments, trying lots of things, being wrong a lot, and learning from it. One of the things about thought leadership that’s so powerful from my frame of reference is that people who exhibit thought leadership are truly curious, are trying to learn, are looking for data, and are building feedback loops from what they’re learning that then allows them to be more effective leaders in whatever role they have.

Cult of personality a lot of times masquerades as thought leadership . . . [but it tends] to be self-reinforcing around the awesomeness that is that person or the importance that is that person, or the correctness of the vision that person has. And what happens with cult of personality is that you very often, not always, but very often, lose the signal that allows you to iterate and change and evolve and modify so that you build something that’s stronger over time.

In some cases, it goes totally off the rails. I mean, just call it what it is: what business does a private company have, regardless of how much revenue it has, to buy a Gulfstream V or whatever [WeWork] bought? It’s crazy. ..

From an entrepreneurial perspective, I think being a leader with thought leadership and introspection around what’s working and what’s not working is much, much more powerful over a long period of time than the entrepreneur or the leader who gets wrapped in the cult of personality [and is] inhaling [his or her] own exhaust.

TC: Have you been in that situation yourself as a VC? Could VCs have done something sooner in this case or is that not possible when dealing with a strong personality?

BF: One of the difficult things to do, not just as an investor, but as a board member — and it’s frankly also difficult for entrepreneurs — is to deal with the spectrum that you’re on, where one end of the spectrum as an investor or board member is dictating to the charismatic, incredibly hard-driving founder who is the CEO  what they should do, and, at the other end, letting them be unconstrained so that they do whatever they want to do.

One of the challenges of a lot of VCs is that, when things are going great, it’s hard to be internally critical about it. And so a lot of times, you don’t focus as much on the character. Every company, as it’s growing the leadership, the founders, the CEO, the other executives, have to evolve. [Yet] a lot of times for various reasons, and it’s a wide spectrum, there are moments in time where it’s easier to not pay attention to that as an investor or board member. There’s a lot of investors and board members who are afraid to confront it. And there’s a lot of situations where, because you don’t set up the governance structure of the company in a certain way, because as an investor you wanted to get into the deal, or the entrepreneurs insist on [on a certain structure], or you don’t have enough influence because of when you invested, it’s very, very hard. If the entrepreneur is not willing to engage collaboratively, it’s very hard to do something about it.

Again, if you’re an Extra Crunch subscriber, you can read our unedited and wide-ranging conversation here.


TechCrunch

Adam Neumann may be out of the daily flow of WeWork, but he seemingly remains top of mind to some of the company’s bankers.

According to a new Business Insider piece, Neumann is working with JPMorgan, UBS, and Credit Suisse to consider new terms for a $ 500 loan that he took out before WeWork filed to go public, and from which Neumann has already drawn down $ 380 million. Since he can no longer pay the loan with proceeds from selling WeWork shares publicly (it yanked its S-1 earlier this week), he may have to put up some of his properties or other assets as collateral for the loan, according to one of BI’s sources.

“No terms have been set,” a spokeswoman for Neumann tells the outlet.

Per earlier reports, Neumann has plenty to offload if it comes to it, having acquired numerous residential and commercial properties over the years.

Among his reported investments is a $ 10.5 million Greenwich Village townhouse; a farm in Westchester, New York; a home in the Hamptons where he reportedly weathered the storm with his family ahead of resigning as CEO last week; and a $ 21 million, 13,000-square-foot house in the Bay Area with a guitar-shaped room.

According to an earlier WSJ report, Neumann has also bought several properties through investor groups that he had leased back, in some cases, to WeWork.

WeWork, and Neumann, have both enjoyed a close relationship with JPMorgan in recent years. As recently reported in the NYTimes,  JPMorgan “lent Mr. Neumann money personally (with his inflated shares as collateral), provided equity and debt for the company, served as a corporate adviser for the I.P.O. and secured nearly $ 6 billion in financing as part of the now scotched offering.”


TechCrunch

It could just be a better job offer, but WeWork’s top communications executive, Jennifer Skyler, has announced to her contacts that she is leaving the co-working giant to become the chief corporate affairs officer at American Express later this fall.

Skyler joined WeWork four years ago as its first communications hire, after spending three years as a director of communications at Facebook in New York. Skyler joined the fast-growing company as its global head of public affairs, working with us closely when we sat down with cofounder and CEO Adam Neumann at TechCrunch Disrupt in 2017.

Last year, she was promoted to the role of chief communications officer.

Skyler calls the past few years an “incredible journey,” one she was ready to end just as WeWork attempts to go public, apparently against the wishes of its biggest backer, SoftBank, which has concerns about how WeWork will be valued by public market shareholders.

Worth noting, another top communications exec, Dominic McMullen, who joined WeWork in 2016 as a vice president and the head of corporate communications, also recently announced some “personal news,” telling his network in late July that after becoming a dad (twice) in recent years, he had decided to take time off to spend with his family in Brooklyn for now.


TechCrunch

Adam Neumann, the co-founder and chief executive of the international real estate co-working startup, WeWork, has reportedly cashed out of more than $ 700 million from his company ahead of its initial public offering.

The size and timing of the payouts, made through a mix of stock sales and loans secured by his equity in the company, is unusual considering that founders typically wait until after a company holds its public offering to liquidate their holdings.

Despite the loans and sales of stock, first reported by The Wall Street Journal, Neumann remains the single largest shareholder in the company.

According to the Journal’s reporting, Neumann has already set up a family office to invest the proceeds and begun to hire financial professionals to run it.

He’s also made significant investments in real estate in New York and San Francisco, including four homes in the greater New York metropolitan area, and a $ 21 million 13,000 square-foot house in the Bay Area complete with a guitar shaped room (I guess a fiddle would be too on the nose). In all, Neumann reportedly spent $ 80 million on real estate.

Neumann has also invested in commercial real estate (the kind that WeWork leases to provide workspace with more flexible leases for companies and entrepreneurs), including properties in San Joes, Calif. and New York. Indeed four of Neumann’s properties are leased to WeWork — to the tune of several million dollars in rent. According to the Journal, Neumann will transfer those property holdings to a WeWork-controlled fund.

The WeWork chief executive has also invested in startups in recent years. He’s got an equity stake in seven companies including: Hometalk, Intercure, EquityBee, Selina, Tunity, Feature.fm, and Pins, according to CrunchBase.

The rewards that Neumann is reaping from the loans and stock sales are among the highest recorded by a private company executive. In recent years, Evan Spiegel sold $ 8 million in stock and borrowed $ 20 million from Snap before its 2017 public offering and Slack Technologies chief executive Stewart Butterfieldsold $ 3.2 million of stock before Slack’s public offering in June.

The only liquidation of stock and other payouts that have been disclosed which come close to Neumann’s payouts are the $ 300 million that GroupOn co-founder Eric Lefkofksy’s sold before his company’s IPO and the over $ 100 million that Mark Pincus took off the table ahead of Zynga’s offering.

WeWork declined to comment for this article.

 


TechCrunch

This week, a young, New York-based startup called Alma raised $ 8 million in funding to expand its “co-practicing community of therapists, coaches, and wellness professionals,” which it first launched from a space on Madison Avenue last fall.

As CNN was first to report, the company is charging psychiatrists, psychologists, clinical social workers and acupuncturists $ 165 per month to become Alma members, which comes with services like billing and scheduling and even a matchmaking service that purports to connect professionals with patients. They also pay an hourly rate to book identically outfitted rooms that can be used interchangeably.

CNN called the company a WeWork for therapists, but Alma and its venture backers are hardly alone in seeing promise in more specialized co-working spaces, which have proliferated as their best-known peer in the co-working craze, WeWork, has itself set up all over the globe. According to one estimate, the number of global coworking spaces, thought to be around 14,000 in 2017, is expected to reach 30,000 by 2022.

One of these outfits — one backed early on by WeWork itself — is The Wing, a nearly three-year-old startup that describes itself as a members-only community full of work and community spaces designed for women. (It dropped its practice of not admitting men as members or guests after a Washington, D.C. man brought a gender-discrimination lawsuit against the firm that sought damages of up to $ 12 million.) Though the startup has critics who worry that it advances only women who can afford to pay a few hundred dollars per month for a membership, investors have already given it nearly $ 120 million in funding.

They’re betting that women want to work and share ideas and see powerful female speakers alongside other women who are members. But investors and entrepreneurs are betting on broader trends, too. For one thing, it’s clear that commercial real estate owners need new ways to occupy underutilized space as our lives move increasingly online.

Greater numbers of people are also becoming freelance workers, a trend that shows no signs of stopping. According to the Freelancers Union, 3.7 million more people started freelancing between 2014 and 2018 for an estimated total of 56.7 million America freelancers. That’s a huge segment of the working population.

Perhaps it’s no wonder that Spacious, a three-year-old, New York-based company that turns restaurants into co-working spaces during the afternoon, is backed by some of the best investors in the business, including Baseline Ventures. (Other companies taking advantage of underused space include Breather and Flexe.)

More interesting is a newer trend of spaces built out for specific groups of people. Therapists is just the newest that we’ve heard, but there are plenty of others. L.A. alone is home to Glitch City, a 24-hour co-working space that caters to indie game developers; The Hatchery Press, for writers; and Paragon Spaces, for those working in the cannabis industry. Elsewhere, it’s possible to find with co-working spaces for people in the construction industry, and spaces for tech companies with on-demand workforces, and spaces for people committed to a zero-waste lifestyle.

It’s probably too early to say whether the niche spaces are any more sticky than more general co-working spaces like the fashionable spots that WeWork sells. Having been part of a long-standing, not-for-profit writers’ collective in San Francisco for roughly a decade — and aware that numerous of my former office mates continue to be a part of that community — this editor would guess that they are. They’re also far less scalable, presumably.

But the much bigger question — for WeWork and the growing number of more focused startups to emerge in recent years — is whether enough people can justify the cost of working in their spaces when the economy invariably hits the skids.

It’s easier to imagine this happening with communities of doctors or other professionals who, through sheer dint of working together, can defray their costs and generate more business for themselves. For the rest, only time will tell. Either way, VCs have a lot of money to put to work and plenty are willing to gamble that right now, at least, there are few limits on where the trend can go.


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