Hello and welcome back to Equity, TechCrunch's venture capital focused podcast, where we unpack the numbers behind the headlines.
This Week Kate and Alex were back at TechCrunch's San Francisco HQ to stifle the week's biggest news story: WeWork's notorious CEO is leaving his role. Adam Neumann is now just the non-executive chairman of The We Company, a company he helped find and manage public history over the past six decades.
His exit comes after a series of revelations that made him employed by highly valued WeWork seem chaotic and self-handling. After the valuation of WeWork fell as it ran toward a financially critical IPO, something had to give. The company tried to relieve investors with changes (read: improvements) to the company's management, but that was not enough. Snakes do not rot from the tail, and WeWork needed new leadership, which took the form of co-CEOs .
WeWork is now led by Sebastian Gunningham and Artie Minson, experienced executives with stints on Amazon and Time Warner Cable respectively. They have been accused of leading the company into a time of maturity, cost cuts and maybe even profitability! But probably not. Regardless, we believe there are many parallels to be drawn between Uber and WeWork, as we have made clear earlier.
Kate and Alex also touched on corporate governance, especially with regard to voting shares. TL; DR: Private corporate governance looks and operates much differently than public corporate governance. More often than not, start-up boards consist of venture capitalists with a focus on protecting equity and future returns. It's a world that dogs and eats dogs, folks.
When it strikes, it seems likely that WeWork will look to secure new cash in the short term when it cuts up on business, disposes of, or kills non-performing assets (remember this?) And looks to temper both the growth rate and the losses. Whether it will be enough for the company to float in 2020 (201[ads1]9 seems unlikely) is not clear.
We're back Friday morning with our regular episode and a guest. Pay attention!
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