In his first public comments since being ousted from WeWork two years ago, the shared work space company’s co-founder and former CEO Adam Neumann expressed sympathy for the many employees whose options became worthless when WeWork’s business imploded but said that risk came with the territory.
“It was never my intention for the company not to succeed, and not what they signed up for,” Neumann told the New York Times DealBook Summit on Tuesday morning, stopping short of an apology.
WeWork, which went public two weeks ago via a special purpose acquisition company (SPAC), laid off thousands of employees after its IPO plans fizzled in 2019, not long after its valuation reached a peak $47 billion. Investors questioned the company’s business model and the unorthodox management style of Neumann. (WeWork has a current market capitalization of nearly $8 billion.)
“When you take equity and you’re trying a start-up, you take a risk,” Neumann said. “I wish it would have worked out differently for everybody,” he added. In his case, it turned out well, with him getting $1 billion on the way out, a move that earned him plenty of criticism.
As for his often erratic management style, he acknowledged that WeWork’s mammoth valuation had gone to his head, but said his approach seemed the right one for a long time, one with the support of WeWork investors, the biggest of which was SoftBank. “For a long time—for seven years out of the nine I was there—it was working really well,” said Neumann, pointing to how quickly WeWork had gone global and served markets in 60 languages, as well office space business from tech giants like Google, Facebook and Microsoft. “This perception that, as the company went from $47 billion valuation down to $9 billion, and I profited somehow while the company is going down, is completely false,” he said.
Neumann skirted questions about WeWork’s former reputation for having a wild culture that included lots of drinking and marijuana smoking in the workplace, saying only, “We had a fun culture.”
The entrepreneur also addressed some old criticisms that under his management, WeWork engaged in self-dealing and creative accounting.
Neumann denied there was self-dealing, but said there were “related party transactions.” He also responded to questions about an unusual accounting metric pioneered and previously used by WeWork called “community adjusted EBITDA,” which he said was simply the adjusted earnings before interest, taxes, depreciation and amortization of an individual physical space.
One of the many lessons he’s learned from the WeWork debacle, he said, was that, “When it comes to finance, it’s better to be boring.”
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Source: finance.yahoo.com