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WeWork's business model makes more sense when you realize it's probably just a scheme for transferring VC money directly into Adam Neumann's pocket. He owns a number of the buildings that WeWork is leasing: https://www.bizjournals.com/sanjose/news/2019/01/16/wework-c...



Also worth noting the trademark "We":

https://twitter.com/seldo/status/1161822659610497025?s=20


No longer true; he transferred them to a fund owned by the company:

https://www.businessinsider.com.au/wework-ark-fund-to-buy-co...


That link says he transferred them at cost, which means he still made a profit off of them beside the company. The fact that he even did that in the first place is very questionable.


I don't mean to be facetious but how does that make it better? Doesn't he still control the company that owns the fund?

Is it suppose to be better because it "looks" better because with my minimal understanding there isn't a difference.


His personal ownership was a problem as it created a conflict of interest between his personal property assets the the company, so you have scenarios where he is engaging in related party transactions [1], i.e., potentially entering into lease agreements at above-market rates, to benefit himself personally, and (as the sibling commenter pointed out), having highly valuable property assets, funded by company loans, that remain in his personal ownership even if WeWork goes out of businesses.

When the company owns the properties, that ceases to be the case, as there is no conflict of interest between property owner and occupier as they are one and the same.

He is (and was) still always legally obliged to act bona-fide in the interest of the company (i.e., act as much for the benefit of minority shareholders as his own).

It was just harder to scrutinise when he was both the majority shareholder of the company, and landlord for some of its properties. That is no longer the case.

[1] https://en.wikipedia.org/wiki/Related_party_transaction


I mean, it is different / better.

Now, if WeWork goes belly up, Neumann doesn't get to keep the buildings.


But he gets to keep the money that they paid him for the buildings.




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