Adam Neumann, the chief executive, and co-founder of the international real estate co-working start-up WeWork has cashed out over $700 million from his company just prior to its public offering.
The size and timing of the pay-outs, made through a mix of loans and stock sales secured by his equity in the company is unusual, considering the fact that founders usually wait until after a company holds its public offering to liquidate their holdings.
Despite sales of stock and loans, reported by The Wall Street Journal, Neumann remains to be the single largest shareholder in the company.
According to the reports of the journal:
“Neumann has already set-up a family office to invest the proceeds and begun to hire financial professionals to run it.”
He is also known to make significant investments in real estate in San Francisco and New York. This includes four homes in the New York metropolitan area and a $21 million, 13000 square-foot house in the Bay Area complete with a guitar-shaped room. It is reported that Neumann had spent around $80 million on real estate.
Other than that Neumann is also known to invest in commercial real estate. This includes properties in Calif, New York, and San Jose. At least four of his properties are leased to WeWork, to the tune of several million dollars in rent. As reported by the journal:
“Neumann will transfer those property holdings to a WeWork-controlled fund.”
He has also made investments in start-ups in recent years. He is reported to have an equity stake in seven companies including Intercure, EquityBee, Selina, Hometalk, Feature.fm and Pins.
Neumann is actually reaping great rewards from stock sales and loans. His rewards are the highest recorded by a private company executive. In recent years, Evan Spiegel sold $8 million in stock and borrowed $20 million from Snap before its 2017 public offering. Stewart Butterfield, chief executive of Slack Technologies sold $3.2 million of stock before Slack’s public offering in June.
WeWork has refused to comment anything on the matter.