A reported $350 million investment into a new, yet-to-be-launched real estate venture founded by a controversial businessman has drawn criticism from women entrepreneurs.
The investment, which was made and publicly shared by venture capital powerhouse Andreessen Horowitz, is in Flow, the new company of WeWork co-founder Adam Neumann.
Given Neumann’s questionable business dealings and his abrupt exit from WeWork amid a fraught initial public offering in 2019, this new investment typifies the immense gap that exists in comparison with how much money venture-funded companies founded solely by women garner, experts say.
The investment is a prime example of how venture capital (VC) ecosystems “have always been inequitable,” Rebekah Bastian, the CEO and co-founder of OwnTrail, a startup that helps people achieve their next personal and professional milestones, told NPR.
“When 16% of investment partners at VC firms are women, 3% are Black and 4% are Latinx, it’s not shocking that women founders have received 1.9% of venture dollars so far in 2022,” Bastian told NPR over email. “Black-founded startups in the U.S. raised less in Q2 2022 in aggregate ($324 million) than Adam Neumann received in a single check from Andreessen Horowitz.”
To understand why Neumann, Flow and the millions of dollars raised caused a groundswell of condemnation among women, one place to start is Aug. 14, 2019.
That’s the day WeWork first released its paperwork to go public and revealed to the world how Neumann had siphoned hundreds of millions of dollars for himself, restructured the company to provide himself a tax break and rented his own properties to WeWork.
A month later, The Wall Street Journal reported on Neumann’s partying and “unusual exuberance and excess.” One of the more puzzling aspects of Neumann’s tenure was how an entity he controlled “sold the rights to the word ‘We’ to the company for almost $6 million—before public pressure led him to unwind the deal,” the Journal reported.
Neumann stepped down as WeWork’s CEO on Sept. 24, 2019, not long after the company’s valuation, once estimated at $47 billion, dropped precipitously.
To see Neumann raise hundreds of millions of dollars roughly three years after his exit from WeWork is a sign of how “there will be Adam Neumanns but there won’t be Abagail Neumanns,” said Katica Roy, a gender economist and the CEO and founder of Pipeline, an award-winning startup that uses artificial intelligence and cloud computing to close the gender equity gap in the workplace. Roy is also the daughter of a refugee who was brought to the U.S. on Air Force One after being granted passage by President Dwight Eisenhower.
“The Flow funding illustrates perhaps the most high-profile example of ‘prove it again’ bias, or the fact that women have to work harder than men to substantiate their competence,” Roy told NPR over email. “These biases lead to smaller and fewer checks for women entrepreneurs and entrepreneurs of color.”