The Eternal Con Artist is Back With a New Con… via /r/wallstreetbets #stocks #wallstreetbets #investing

The Eternal Con Artist is Back With a New Con…

From Bloomberg:

Adam Neumann Is Back, This Time With a Cry*pto Angle

Flow, the controversial entrepreneur’s new real estate startup backed by Andreessen Horowitz, has plans to use crypto with its digital wallet. After Adam Neumann was very publicly ousted from his job as chief executive officer of WeWork Inc. in 2019, he stayed silent for a period, traveling with his family and giving few interviews as people produced books, podcasts, and fictional TV shows about his dramatic fall from glory. Three years later, it’s clear that Neumann picked up a new interest during his post-WeWork hibernation: crypto.

Neumann has helped found two separate startups that involve crypto: Flow and Flowcarbon. (Neumann said recently that “flow” is one of his favorite words.) Flowcarbon uses blockchain technology to track carbon credits, and Flow, which raised $350 million from Andreessen Horowitz in August, is a residential real estate company. Flow hasn’t made the details of its plan public, but they include a digital wallet for handling cryptocurrencies, according to people familiar with the matter, who declined to be identified in discussing private information. The wallet would also offer other financial services, such as allowing users to connect a bank account.

During his time as the CEO of WeWork, Neumann faced allegations of excessive spending, conflicts of interest, and grandiose eccentricities—then, after a failed attempt at an initial public offering, he left the company, which dropped from a private valuation of $47 billion to a public trading price today of about $3 billion. When Andreessen Horowitz announced it was investing in Flow, critics questioned why someone with Neumann’s track record should keep receiving checks.

Within the crypto industry, which has had no lack of outlandish personalities and shameless hucksterism, Neumann’s past does not seem to be raising many concerns. He’s “a world-class founder,” says Michael Anderson, co-founder of crypto venture-capital firm Framework Ventures. After all, one of Neumann’s indisputable strengths is building hype: He raised billions from investors for WeWork and turned straightforward real estate subleasing into a headline-grabbing business adventure.

After a striking boom, the digital asset industry has been besieged this year by steep drops in token prices and dwindling interest from venture capitalists. It could use some of Neumann’s swagger right now. “If he can build something as big as WeWork again, I think that will be really positive for our industry if there is an element of Web3,” says Anderson.

Neumann didn’t publicly show much interest in cry*pto before he resigned from WeWork. But the startups he co-founded are aligned with his past interests—and quirks, such as his spiritual energy. WeWork’s prospectus noted the company’s mission to “elevate the world’s consciousness” and its belief in “the power of we.” That same ideology and mission has infused Flowcarbon, where Neumann and his wife, Rebekah Neumann, are among a group of five co-founders. (The pair don’t hold operational roles.) Flowcarbon uses a coin called the “Goddess Nature Token.”

Cry*pto could also provide a new way for Neumann to realize a lifelong interest of his: building (and selling) community. Neumann grew up in Israel on a kibbutz, and he incorporated its ideals of community and sharing when building WeWork. He waxed poetic about creating a “We Generation” among his customers, and he spoke publicly about giving all WeWork employees equity in the company, no matter their role.

Cry*pto tokens offer a new way to build a sense of community among a large group of people. Flow investor Marc Andreessen hinted in a blog post at the company’s interest in connection, saying that “giving renters a sense of security, community, and genuine ownership has transformative power for our society.”

It’s unclear exactly what the crypto element of Flow will be, and plans for the wallet could change, but one possibility is a rewards program that uses blockchain, according to the people familiar with the startup. Flow currently has no plans to represent real estate ownership or rentals using crypto tokens, the people say.

This kind of rewards program could dovetail with Web3’s goal of fostering distributed communities. “If your aim is to build a huge community, you know, tens, hundreds of thousands of people, then certainly cry*pto could make sense,” says Stan Miroshnik, partner and co-founder of 10T Holdings LLC, which has invested in digital asset exchanges Kraken and Gemini Trust Co. He’s curious to see what Neumann cooks up next. “I welcome innovation in all forms.”

For Miko Matsumura, general partner with crypto VC firm Gumi Cryptos Capital, Andreessen Horowitz’s investment in Flow gives a promising signal that there’s still capital flowing into cry*pto. And while giving Neumann a second chance may put some people off, investors pride themselves on doing things that run counter to conventional wisdom. “If you are in the venture capital business, you can’t actually back normal people,” Matsumura says.

Bloomberg Link

Submitted September 08, 2022 at 07:03PM by AdsterPatel
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