Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast, where we unpack the numbers behind the headlines.
This week Kate and Alexwere back at TechCrunch’s San Francisco HQ to huddle over the weeks’ biggest news story: WeWork’s infamous CEOexiting his role. Adam Neumann is now merely the non-executive chairman of The We Company, a firm that he helped found and led the public story for over the last half-decade.
His exit comesafter a number of revelationsmade his tenure at the highly-valued WeWork appear chaoticand self-dealing. After WeWork’svaluation tumbledas it raced towards a financially-critical IPO,something had to give. The firm tried to ameliorate investors with changes (read: improvements) to its corporate governance but that wasn’t enough. Snakes don’t rot from the tail, and WeWork needed new leadership, which it got the form of co-CEOs.
WeWorkis now led by Sebastian Gunningham and Artie Minson, seasoned executives with stints atAmazonand Time Warner Cable, respectively. They’ve been charged with leading the company into an era of maturity, cost-cutting and maybe even profitability! But probably not. Anyway, we think there are a whole lot of parallels to draw betweenUberand WeWork, as we’ve made clear in the past.
Kate and Alex also touched on corporate governance, especially regarding super-voting stock. The TL;DR: private company boards look and operate much differently than public company boards. More often than not, startup boards are made up of venture capitalists focused on protecting their equity and future returns. It’s a dog-eat-dog world, folks.
Wapping, it seems likely thatWeWorkwill look to secure new cash in the short-term as it buttons up its business, divests or kills off non-performing assets (remember this?), and looks to temper both its growth-rate and losses. If that will be enough to allow the company to float in 2020 (2019 seems unlikely) isn’t clear.
We’re back Friday morning with our regular episode and a guest. Stay tuned!