The career rise of Adam Neumann, the controversial WeWork cofounder who just stepped down as CEO

• WeWork, now called The We Company, publicly filed to go public in August, but has since delayed its IPO among concerns over its business and co-founder Adam Neumann.
• Neumann has been at the helm of the company since it launched in 2010, but he announced Tuesday he would step down from his position amidst scrutiny.
• Here’s everything you need to know about the former WeWork CEO, who has five children and has purchased an estimated $80 million worth of real estate.
• Read all of BI’s WeWork coverage here.

Adam Neumann has run WeWork since it first got its start nearly 10 years ago. On Tuesday, he stepped down from his role as CEO.

The 40-year-old Israeli-born Neumann is worth an estimated $2.2 billion, and has come a long way from the shoe-box-sized New York city apartment he first lived in in the early 2000s.

But his co-working company, last valued at $47 billion, has been rocked by criticism and controversy since it filed its IPO paperwork in mid-August, which revealed spiraling losses. Since the paperwork was released, WeWork has suffered from a lack of investor interest, and has since announced it’s delaying its plans to go public.

In the aftermath, attention turned to Neumann. Scrutiny was placed on his business investments and his complex web of personal connections within WeWork that could pose conflicts of interests. In response, WeWork announced some changes, but it wasn’t enough to get the IPO back on track.

On Tuesday, Neumann announced he was stepping down as CEO in the company's "best interest," saying he was becoming "a significant distraction" to WeWork's IPO plans. He'll remain as non-executive chairman of the WeWork board, and was replaced by co-CEOs Sebastian Gunningham and Artie Minson.

Here's everything you need to know about Adam Neumann, the WeWork cofounder and ousted CEO:

Adam Neumann, 40, was born is Israel in 1979. His parents got divorced when he was 7, and he moved around a lot as a child with his mother — he reportedly lived in 13 different homes by the time he was 22.

Source: New York Magazine

As a child, Neumann lived for some time on an Israeli kibbutz, one of the collective community settlement across the country. Neumann attended school near the Gaza Strip while his mother worked as a doctor at a nearby hospital.

Source: Haaretz

Neumann is severely dyslexic, and couldn't read or write until he was in third grade.

Source: Forbes

As is customary for Israeli citizens, Neumann served in the Israel Defense Forces after grade school. He served in the navy for five years, although only three years of service is required. "That’s where I got to know a lot of my best friends," Neumann told Haaretz in 2017.

Source: Haaretz

After leaving the IDF, Neumann moved in 2001 to New York City, where he lived in a Tribeca apartment with his sister Adi. He spent his early days in New York going to clubs and “hitting on every girl in the city,” he said in a commencement speech in 2017.

Source: New York Magazine

Neumann enrolled at city school Baruch College in January 2002 and majored in business. He said he thought of the concept of WeLive, WeWork's communal living business, for a school entrepreneurship competition. However, the idea was killed in the competition's second round, because a professor didn't think Neumann would be able to raise enough money "to change the way people live."

Sources: New York Magazine, TechCrunch

Neumann dropped out from college just four credits shy of graduating. He ultimately finished his degree 15 years later in 2017 after completing a four-month long independent study, and delivered the commencement speech for Baruch College's graduating class.

Sources: TechCrunch, Business Insider

While in college, Neumann met his now-wife, Rebekah Paltrow Neumann, who is the cousin of actress Gwyneth Paltrow. The pair got married in 2009, and now have five children together.

Source: Observer, Real Deal

On their first date, Paltrow Neumann called out the WeWork cofounder for being "full of s---." Neumann credits his wife for getting him to stop smoking, and for telling him to pursue his passions instead of dreams to be rich.

Sources: Business Insider, Business Insider

Paltrow Neumann serves as the founder and CEO of WeGrow, the business under the WeWork company umbrella that operates an elementary school in New York. She was a WeWork founding partner, when she learned there's "no job too big or too small for each person."

Sources: Coveteur, WeGrow

Read more: WeWork is just one of the businesses owned by a $47 billion company that could reveal its IPO paperwork any day now - check out the full list

While Neumann was at college, he worked on two business ventures: a failed idea for collapsible heeled shoe, and baby clothes with built-in knee-pads called Krawlers. He dropped out to pursue the second idea, and developed it into a baby-clothing company called Egg Baby in 2006.

Sources: Forbes, TechCrunch

Egg Baby is still around today as a luxury baby clothing company headed up by clothes designer Suzan Lazar. Neumann is no longer involved in the day-to-day operations of Egg Baby, whose children's clothing is sold at department stores around the world.

Sources: Forbes, TechCrunch

Soon after launching Egg Baby, Neumann met WeWork cofounder Miguel McKelvey through a mutual friend. The two reportedly bonded over their backgrounds and competitive streaks, and McKelvey convinced Neumann to move Egg Baby offices to the same building he was working out of in Brooklyn.

Source: Forbes, New York Magazine

Soon after, the two developed the idea for WeWork after brainstorming an idea for renting out empty office space to other companies. In 2008, they convinced their building's landlord to let them rent out a floor in a nearby Brooklyn building, and an earth-friendly co-working company called Green Desk was born.

Sources: Forbes, New York Magazine

However, McKelvey and Neumann decided to go off on their own. They sold off their share of Green Desk to their landlord for $3 million, and opened their first WeWork space in 2010 in New York's Little Italy neighborhood.

Sources: Forbes, New York Magazine

Under Neumann as CEO, WeWork has expanded to provide co-working desk space in commercial buildings in more than 120 cities in nearly 40 countries. The company was last valued at $47 billion.

Sources: Business Insider, Forbes

One of WeWork's biggest investors is the Japanese investment firm SoftBank, who has invested more than $10 billion in the company. Neumann has told Business Insider about his close relationship with SoftBank CEO Masayoshi Son, who he calls "Yoda."

Source: Business Insider

Neumann himself has an estimated net worth of $2.2 billion. Since founding WeWork, Neumann has spent over $80 million on five homes, including two properties in New York City and one home in the Hamptons. In 2018, he reportedly purchased a 13,000-square-foot home in the San Francisco area, complete with a guitar-shaped room, worth $21 million.

Sources: Wall Street Journal, Business Insider

Neumann has also invested in a number of startups, both by himself and on behalf of WeWork. His niche-interest investments include a wave-pool maker, a medical marijuana provider. and a superfood startup, which sells things like "performance mushrooms," powdered coconut water infused with beets and turmeric, and highly caffeinated coffee.

Source: Business Insider

Neumann is WeWork's largest single shareholder. However, in recent years, he's cashed out some of his stake and also taken out loans. In total, Neumann's sales and debt transactions have reportedly totaled $700 million.

Source: Business Insider

The company — which rebranded to the We Company in January — publicly filed for an IPO on August 14. The IPO filing gave the public its best view yet at the company's money-losing financials: notably, $1.6 billion in losses on $1.8 billion in revenue in 2018.

Business Insider's Troy Wolverton and Shona Ghosh write in their coverage of WeWork's S-1 that:

"The numbers show spiraling losses over the last three years:

• During the year December 31, 2016, WeWork lost $429 million on $436 million in revenue.
• The following year that loss increased to $890 million on $886 million in revenue.
• And for the full year 2018, WeWork lost $1.6 billion on $1.8 billion in revenue.
• For the first six months of 2019, the firm posted a loss of $690 million on $1.5 billion in revenue.

We Co. will be the most highly valued startup to go public since Uber in May."

• Read more of Business Insider's WeWork coverage:
• WeWork just filed to go public - Check out the company's journey from one SoHo building to a $47 billion valuation
• WeWork's founder and CEO didn't take a salary last year as the company prepared for its massive IPO
• WeWork is going public with an extremely weird, complicated structure
• WeWork is just one of the businesses owned by the $47 billion company that just filed for its IPO - check out the full list

However, along with WeWork's IPO paperwork came further scrutiny of its business. The filings showed that WeWork paid Neumann just shy of $6 million for the trademark rights to the word "we," for the company's name change to the We Company in the beginning of 2019. After widespread criticism, Neumann paid the money back.

Source: Business Insider

The IPO paperwork also revealed a number of Neumann's potential conflicts of interest regarding WeWork. Neumann was revealed to have personal financial ties to WeWork buildings, and his wife Rebekah was listed as one of three people who would decide the next CEO if Neumann could no longer run the company. WeWork has since limited her power by removing her ability to help choose the next CEO, and also banned her and any of Neumann's family members from serving on the board.

Source: Business Insider

A report in late August revealed that WeWork has been bleeding human resources managers, and some pointed fingers at Neumann himself as the reason. Neumann reportedly criticized employees as "B players" behind their backs.

Source: Business Insider

The IPO paperwork also showed that Neumann has special shares in WeWork that gave him a massive 20 votes per share, as well as majority control over the company. However, his power was limited in WeWork's amended IPO filing in September, in which the company slashed its valuation from $47 billion to below $20 billion.

Sources: Business Insider, Business Insider

Days after WeWork announced it was officially delaying its IPO, a Wall Street Journal report detailed Neumann's hard-partying ways, and drug and alcohol use. Two of the most startling revelations in the piece: Once after announcing layoffs, Neumann sent around tequila shots and organized a surprise Run-DMC concert. Also, his private jet was once recalled in Israel after marijuana was found hidden in an onboard cereal box.

Source: Wall Street Journal

Amidst all the criticism, Neumann's leadership of WeWork was thrown into question. WeWork's board of directors met in September to discuss the possibility of removing Neumann as CEO — something reportedly backed by one of Neumann's best assets, SoftBank head Masayoshi Son.

Source: Business Insider

But on September 24, Neumann said he would be stepping down from his role as WeWork CEO. Neumann said in a statement that he had become a "significant distraction" in recent weeks, and it was in the company's "best interest" to resign. Neumann will remain chairman, while two current WeWork executives will take his place as co-CEOs.

Source: Business Insider