Money Crimes with Nicole Lapin - INTERVIEW: WeWork with Teddy Kramer

Episode Date: July 24, 2025

Teddy Kramer joined WeWork's rapidly expanding empire in 2013, an early employee building its global footprint and hoping for a huge equity payoff. But behind the hype, Teddy quickly spotted the red flags. In this candid interview, Nicole speaks with Teddy about the real cost of WeWork's ambition. He reveals the blatant financial misdeeds, the bizarre leadership, and how he, as one of the fortunate few, managed to secure his stake before the final crash. Scams, Money, & Murder is a Crime House Original Podcast, powered by PAVE Studios. Listen wherever you get your podcasts. For ad-free listening and early access to episodes, subscribe to Crime House+ on Apple Podcasts. Don’t miss out on all things Scams, Money, & Murder! Instagram: @Crimehouse TikTok: @Crimehouse Facebook: @crimehousestudios X: @crimehousemedia YouTube: @crimehousestudios To learn more about listener data and our privacy practices visit: https://www.audacyinc.com/privacy-policy Learn more about your ad choices. Visit https://podcastchoices.com/adchoices

Hi, it's Kaitlyn Moore. Crime House is home to the most gripping true crime shows, and you don't want to miss what's coming up on my show, Clues, that I co-host with Morgan Apture. We are digging into the chilling details of Amy Archer Gilligan, a nursing home proprietor whose trail of natural deaths turned out to be anything but. Join us as we examine the evidence one clue at a time.

Listen to Clues every Wednesday on Apple Podcasts, Spotify, Amazon Music, or wherever you listen to your podcasts. This is Crime House. Why wouldn't you tell us from the get go what happened? This is a monumental moment in this company. It's important for all of us. We're employees here. And these things kept on happening. We were making the same mistakes over and over and over.

It was the foreshadowing for everything that led to WeWork falling apart. As they say, money makes the world go round. What many don't talk about is the time it made people's worlds come to a screeching halt. Whether it's greed, desperation, or a thirst for power, money can make even the most unassuming people do unthinkable things. And sometimes, those acts can be deadly. This is Scams, Money, and Murder, a CrimeHouse original.

I'm your host, Nicole Lapin. Every Thursday we alternate between covering infamous money-motivated crimes and gripping interviews with the experts or those who were directly involved themselves. Crime House exists because of you. Please rate, review, and follow Scams, Money, and Murder wherever you get your podcasts. And for early ad-free access and bonus content, subscribe to Crime House Plus on Apple Podcasts. WeWork was supposed to change the way WeWork forever. Textile offices, sleek communal spaces, and a mission to elevate the world's consciousness. Teddy Kramer joined WeWork back in 2013 when

it was still a scrappy startup. He helped the company expand into new cities and like many, was rewarded with company shares. Shares that were supposed to pay off big. Instead, he watched from the sidelines as the company spiraled into chaos. The IPO collapsed and the promise of big equity payouts became a mirage for most. While the company's founder walked away with an extremely generous exit package and countless others who helped build the company got little to nothing, Teddy's early gamble and sharp eye allowed him to secure a payout before the final crash. Today Teddy is here to share his story with us. The inside view of WeWork's rise, fall, and the scams hidden beneath the hype. Teddy, welcome to Scams, Money, and Murder.

Thanks so much for having me. Really excited to be here. I really appreciate your time to talk about the WeWork journey debacle. I'd love to start at the very beginning. Can you take us back to 2013? I can go even further back. Oh.

I was on a date one night in New York City where I'm originally from, and this young lady I was on a date one night in New York City where I'm originally from and This young lady I was with said oh, I need to stop by my office really quickly And this is probably circa I wouldn't say 2011 very early days for we work less than three locations at the time all in New York and she takes Me into this space and I'm surrounded by these glass cubicles. They're tiny right, you know one person office that we work with maybe 50 square feet really really, really tight. I'm like, what is this? And she's like, oh, this is my office. Like I rent this glass box every month

and I get free coffee and these other people like me. And I was like, this is the dumbest idea I've ever heard in my life. Who would ever want to work in this thing? And then two years later, I was working for them. And how I got to that point of starting to work at WeWork in the beginning of 2013 is I had a startup of my own with a friend of mine. We had sold the company in 2012 and after selling it, I was looking for my next thing and I got an email from a person I knew in New York who, you know, as all networking happens, you know, somebody knows somebody who knows somebody and they send me this one line email and said, you should go work for these guys. And I said, you should go work for these guys. And I said, okay, it was we work and I went in literally about two days before Christmas in 2012. And I went into

what they call New York oh four, that's how they labeled all the locations. It was that your M Y dash and the number it was in the order. So New York or four was on Varick street one 75 there essentially would be a West Soho right by the Holland Tunnel. And, you know, it was this hive of activity, people sitting in open bullpen areas, private offices, coffee, beer, the whole thing, and, you know, the famous line in any startup was like, do you want to get on the rocket ship? Do you want to join this explosive fast based company? And my experience in startups at that time was I was in Jack of all trades. We had taken a 20-person startup and sold it, and I was Mr. Everything.

So I did real estate, facilities, operations, finance, human resources, PR. I was also the chief of staff to the CEO. So I had a lot of experience as someone in a startup, but was even more excited about working with startups. And I just sitting there in that first week, I was like, yeah, let's do this. And the powering process was maybe 48 hours, two days, like a lot of startups, it just goes really quick. If they like you, they like you. If they don't, they don't. They obviously did something right. And they made me an offer. And it was a terrible offer. I mean, I really was getting paid nothing. Like what's nothing?

Less than $50,000. For what job? So I was going to be the director of what was called WeWork Labs. And what WeWork Labs was, was kind of like a WeWork within a WeWork. It was specifically for early stage startups. They had probably around 50 desks in a bullpen and about only seven or eight private offices. You had to apply to get it. Like traditionally when we worked, if you just, if there was a vacancy, you had the money, you could get an office.

But in order to get into WeWork Lab, Jagdac, they applied. And you had to interview with myself or one of the founders of WeWork Labs, two gentlemen, one named Jesse Middleton, one named Matt Champagne. We had to determine if you were going to fit into the ecosystem. And it was, you know, huge waiting lists, sold out. Everyone wanted to be part of this. Ironically, I was listening to one of the earlier episodes. One of my earliest customers, if we were collapsed, was Billy McFarland. No way.

The company before Magnesius. I can't remember the name of it. And the funny thing about Billy is Billy, his credit card bounced every single month. He always was delayed on payment. He always ended up paying. But the funny part was that once I saw everything that happened with Billy, it was like, Oh my god, I remember Billy. That's crazy. But we had amazing companies like the early sales team at Reddit had an office with us. There was a gentleman who ran a company

called Jack pocket, which like digitized the lottery, which just sold the fan duel for a lot of money. So there was some like really great companies in there. And it was a really genuine organic ecosystem of early stage startups. And my job as, you know, kind of the director of WeWork Labs was to obviously facilitate conversations, run tons of events, ensuring that it was a place for people to connect and engage within the building. And I did such a good job. You know, I generated like hundreds of thousands of dollars in sponsorship revenue

from huge brands like American Express and Delta Airlines and all this stuff. Now within five months, I got promoted, and I was made the director of new market development to start launching all of the new markets for WeWork. And essentially, my journey at WeWork, from that moment on, in the middle of 2013, all the way until my time, my tenure ended in the middle of 2015, I launched every major US market for WeWork.

I took them from five to over 50 buildings. And then I eventually launched all their first international markets in Europe, in London and Amsterdam. And then eventually I cut the cord and jumped out of the rocket ship. While Teddy eventually jumped from that rocket ship, what led to his departure began much earlier. Fortunately, his prior startup experience meant he knew exactly what to look for when it came to his equity.

But those conversations led to more questions than answers. I had had some experience with startups. I knew the terminology and things to ask. 2014 was when Red Flag started to pop up. And once I was given that option grant, I met with the general council of WeWork and I started to ask really straightforward questions. Things like how many outstanding shares are there, right?

Such an important question, by the way, that not a lot of startup people think to ask. Can you explain that a little bit? Yeah, so when you ask how many outstanding shares are, it lets you know what your stake in the business is, right? So if there's like 10 billion outstanding shares and they give you a hundred options, you really have nothing, right? But if there's like a million share outstanding shares and they're giving

you a hundred thousand, like, Whoa, like it's a 10% stake, that's a big deal. They really value me. And when I went to the general counsel, I said, how many outstanding chairs are there? And what do you think the response was? Don't worry about it. This kind of casual dismissal became a recurring theme at WeWork, revealing a deeper lack of transparency

about the company's true financial structure. This wasn't just poor communication. It was a deliberate strategy to control the narrative, often leaving employees to learn critical company news from the outside world. In 2014, what started to happen is we were getting a lot of corporate news from the press, meaning there's all these famous stories about like Adam would be partying on a Tuesday or something. He'd be walking around the office and pouring people tequila shots and all that stuff.

And when you'd go around and say, hey, why is Adam so excited? And people go, that's just Adam. And in reality, it wasn't that that was just Adam, something big had just happened, but they wouldn't tell us. Eventually, what would happen is the Wall Street Journal or the New York Times or, you know, TechCrunch or whatever would come out and say, Hey, we were just raised $250 million from ex investors. And then you get an email the next day, it's like, Hey, we were just raised $250 million from X investors. And then you'd get an email the next day. It's like, Oh, we all think you must've just heard. Almost like they were caught red handed. But again, it was like, why wouldn't you tell us from the get go what happened?

This is a monumental moment in this company. It's important for all of us. We're employees here. And these things kept on happening. Lack of transparency, getting your news from the press, and then at the same time, things being spun. The press would report on one thing, oh, that's not true. You never can figure out what was real and what wasn't.

Then for me, I think the straw that broke the camel's back was probably when Adam brought in his wife and said, hey, this is our new co-founder. It was like, what? What's going on here? I was one of the first 100 employees. I've never seen this person a day in my life. Now all of a sudden they show up.

This shocking, seemingly spontaneous decision to appoint his wife as co-founder was just one example of Adam Newman's unpredictable leadership. His whims directly impacted employees and exposed a chaotic management style beneath the shiny facade of innovation. The company was evolving to a very nepotistic, you either believed or you didn't believe. And if you didn't believe, they didn't have a place for you. And if you didn't believe, then, you know, the hive mind would kind of come around and be like, why don't you believe you're not a part of this? And the analogy I love to use for the WeWork story, it's that the Emperor wore no clothes, right? And just, he was walking down the street, but naked and everyone was like, what a beautiful robe you're wearing. Just for me, it was like, he's naked.

This whole business is naked. And nobody wanted to admit that until it all fell down. Then everyone came out of the shadows and said, oh, I always knew what it was. It's so funny because the first time I saw Adam was at the Four Seasons in San Francisco in the lobby wearing a robe. True story.

And I was like, what is this guy doing talking to a big investor wearing a robe? And they were like, oh yeah, that's Adam Newman. That's just Adam. So this idea that you needed to drink the Kool-Aid, that they were changing the world and you needed to get on board this rocket ship or, as you say, cut the cord. So at what point did some of these red flags turn into wanting to get out? I would say by the beginning of 2015,

I had just launched my third building in London. We've just launched Chicago. But one of the funniest jokes I used to make is, if you want to learn about what's going on, and we were just hanging out by the corporate printer, people would leave tons of documentation. Like they would just print something and they'd walk away and it would just be right there for you all eyes to see.

And it was how I first learned about early secondaries at the business. And for those who don't know what secondaries are essentially it's like when the company raises call it $250 million, someone like Adam and Regal in their position would sell their stock to other investors. Nothing illegal about it happens all the time, but they have a right to do that. And what you find out is like, oh, wow, when the company raised $200 million, Adam sold $50 million with their shares.

It's a disclosure, right? They never told us that. This episode is brought to you by Square. You're not just running a restaurant, you're building something big. And Square's there for all of it. at. real-time insights so you know what's working, what's not, and what's next. Because when you're doing big things, your tools should too. Visit Square.ca to get started. While employees were expected to sacrifice for the rocket ship, executives like Adam Newman were quietly securing their own wealth. These private secondary transactions allowed insiders to cash out, revealing a clear disparity in who truly benefited from WeWork's booming valuation.

But you found out. I've worked at other startups where they tell you that, right? It's like, hey, like we're raising money and like we have our founders and we're going to offer them some liquidity on their shares. And that's just how it is. That's the benefit founders have. But again, like you want to find out those things. All you had to do is hang out the printer. I became very friendly with someone in the finance department who came to me one day and said, Hey, you want to learn some fun stuff about the company? I said, of course. And he started to share with me information about the cap table and other employees and

what their equity stakes were, how much people were making. And what I found out was that essentially if you were in Adam's circle, you were getting paid almost two times more than someone like me. If you were in the circle, you had, I mean, an obnoxious amount of equity in the company. I mean, like life changing. IPO or exit or had some liquidity event. Nobody made any money off the IPO. Right? I feel like people lost money on the IPO. Because that's actually how I eventually made money off of We, was the secondary from SoftBank, right? And that was once I exercised my options, once I left, once SoftBank came in, putting in, again, not hundreds of millions, but billions of dollars into WeWork, part of the deal was that they were going to provide a huge amount of secondaries. And I think they were buying up to $ 1.5 to 2 billion dollars worth of common stock.

So that was an opportunity for folks like me to make some money because I had already left the company. It was an opportunity for early investors like Benchmark Capital to make a lot of money. And there were also an opportunity for people with different shares, you know, early employees, people who had exercised early, whatever. But there were folks in that circle who made a ton of money while there were also a lot of people who spent money on their options, converted it to equity and lost money. So it was pretty wild. I think it's important to untangle that a little

because I don't think it's commonly known what the difference between options and equity would be because oftentimes we hear it as something that's synonymous. But if you're given options in a company, you literally have to buy the equity if you want part of the company. So can you just try to briefly explain what that is? And then the secondary idea essentially is when the executive team was raising extra money, they would take money off the table.

So some of their equity would get cashed out, which is what you ended up doing a few years later. Obviously, part of the exciting and enticing part of working at a startup is that you're going to own a piece of the pie. You know, you go work, get some random company and they're like, okay, here's your salary, here are your benefits, that's it. And part of the double-edged sword of working in startups, like, hey, we don't have all the capital in the world to pay you. You may be the kind of person who's worth $200,000, but I can't pay you that. So I'll pay you less than that, but I'll give you a piece of the pie.

And that's in the form of options. And just like you said, an option is a right to buy these options. And they would then convert them into actual equity or stock, whatever you want to call it. And they have what's called a cliff generally. And what that cliff is, it's like a waiting period. They would then convert them into actual equity or stock or whatever you want to call it. They have what's called a cliff generally. What that cliff is, it's like a waiting period. Usually it's a one-year cliff. Let's say I get offered options on January 1st and it's got a one-year cliff. Those options don't vest, meaning they don't actually become mine until 12 months later, that one year, then they become mine.

And then they have what's called a traditionally a four year vest. So the one year cliff happens. And then for the preceding three years, every month I get a little bit more of the pie. And it's a kind of way of saying, hey, be loyal. Yeah, don't leave. Exactly. Also, please don't leave because if you don't leave, you'll keep getting a little bit more of the pie every single month.

But that one year cliff is like, hey, you've got to kind of earn it. If you sign your option agreement on January 1 of 2026, and you have a one-year cliff, and then you leave in November of 2026, you get nothing. Right. Right? So you have to stick around. The funny thing I also forgot to mention with the WeWork options is it was a five-year vest. And I remember going to the general counsel and saying, this is really atypical for startups. Why are we doing a five-year vest? Every startup I've ever been at there's a four-year vest with the wet cliff a one-year clip one-year cliff five-year vest And of course, what was the answer? I got don't worry about it. Don't worry about it

So they were doing a lot of you know, very different things and a very funny story and I felt so bad for these people There were people who were earlier than I was like like I'd say first 40, first 50, who were given stock options. Now this is getting really granular, but there are two kinds of stock options. There are ISOs and NSOs. And the thing about ISOs is ISOs can only be given to employees.

NSOs can be given to pretty much anybody. And the reason why you want ISOs versus NSOs is ISOs have much, much better tax benefits because you're being employed by the company. There's a cap on how much you can give an ISO. I think it's something between like 150 to 200 grand, something like that. I don't know the exact number. And all these early employees were given NSOs. So they got crushed in their taxes and it wasn't even done right.

Well that's why a lot of companies do options. Usually it's not a sketchy thing. It's so that you don't have to pay tax on what you own of the company and if there's some liquidity event it kind of happens automatically where you buy the options and you get the equity and that's it. It's not inherently sketchy. An extra year of a vest is odd but not like super, super crazy. So when you got told, don't worry about it, you obviously did worry about it.

Was there anything that really, really struck you as like, okay, this is more than just weird, this is fraudulent or this is illegal? No, in terms of the actual like mechanisms of the company, the business model, how he raised money, all those things, I view it as just a reflection of the age, a reflection of the 2010s, which is growth at all costs. Growth, growth, growth, growth. We were fed so much bullshit. Oh, we could be profitable any day.

We just have to turn off the growth toes We are going to be this company that changes the entire planet. We're elevating the world's consciousness I mean just stuff that you just couldn't Digest because for someone like me, I was in the trenches I was opening buildings every single month and we were making the same mistakes Over and over and over and we were making the same mistakes over and over and over. Opening buildings that weren't completely finished. Opening buildings that were missing core amenities like functioning bathrooms or having coffee machines or things like that. Now again, this wasn't a mom and pop startup that was like in its early days where you roll up your sleeves and make things happen. This was a really

heavily capitalized, highly staffed global brand at that point. And again, when you would bring these challenges to either managers or even up to Adam, what was the response? Don't worry about it. Either deal with it, don't worry about it, we're all going to be rich one day, aren't you committed to this, so on and so forth. Again, a reflection of this age of like the founder, this amazing founder who can do no wrong and is and you must be loyal at all times.

But despite this culture of blind loyalty, even WeWork's board eventually recognized the need for legitimate business acumen. They began bringing in seasoned executives hoping to stabilize this chaotic operation. The one amazing thing that happened in 2014 and early in 2015 is they started to bring some really competent executives. Members of the board were like, we have to surround Adam with really, really smart people who will make this business as valuable as we think it is. And they would last 90 to eight, either through self-selection and being like, I don't want to be around this, I got to go.

I mean, there was literally an HR executive who came in from Google, who literally lasted 90 days and said, I don't want my name anywhere near this company, and left. Do you know why though? I think just the kind of, you know, coming from a place like Google, where there's a lot of structure,

where they take a lot of pride in their culture, especially in the 2010s, where they were really kind of like North Star in terms of what you want your company culture to be, right? Google had a slide in their office, right around the clock meals, all those things, and a lot of startups and well capitalized startups wanted to copy that kind of culture. Simply stated, if you were working for Adam is not a great manager. He's not the kind of person who is organized. Adam thought he was Steve Jobs. He was the kind of person, is organized. Adam thought he was Steve Jobs. He was the kind of person, you know, he's held his management meetings at like midnight on Mondays.

Imagine if you had a family. Imagine if you were just like a normal human. It's like, I don't want to be in your office downtown at midnight. Adam was known, notoriously known for never being punctual. I knew real estate brokers who would wait hours for him to show up for a tour. Imagine like sitting in a downtown office at midnight waiting for the king to show up. Then they come in and start yelling and screaming at you. I mean, that was the other thing about it. Adam was always, always so impulsive.

He'd see one thing and then you have to act on it. That's the famous story about WeWork going completely vegetarian. Like he got off a plane in Israel and just announced to the world that WeWork was now a vegetarian or vegan operation and they would never serve meat ever again. I mean, I remember the headline. And then when you started to talk to employees like, well, of course we don't practice that. And that was the other problem. It was a lie. It just wasn't true. It was just this like weird posturing to the world that this was this like elevated brand. He thought he was like really pushing culture in one way when in reality it was kind of like a joke. So obviously a super eccentric guy, a lot of suspicious things. But what actually made you decide to leave? We work in 2015.

Just greater opportunity and just being tired. I think one of those big moments for me also was when I found out where I stood, I was a chosen person to do the dirty work. I was, Hey, we're doing London. You're moving to London for three months, drop out of a plane, go make it happen. And I knocked it out the park. It was the kind of place like if you didn't perform, you'd eventually get fired. And most part by the end, I mean, there were so many people, it was kind of almost impossible to. But in the early days, if you weren't good, you were gone. And I was just constantly given more and more responsibility. So I was being told that just from the work I was being given that it was very valuable.

Again, I had people who were just in the inner circle making exponentially more money than me, adding an exponentially larger stake in the company than me. And once I had a recruiter reach out to me and said, do you want to move to California? Do you want to go to San Francisco and join a really well-funded company in a different industry that's looking for someone with your skill set? How can you say no when someone's offering you double your salary, equity, you know, options right off the bat? Like not having to wait a while, like the things that every startup employee deserves and transparency, great investors, a great product, exciting opportunity, you don't flinch because you know where you stand, right?

That was the thing for me is I know where I stood at WeWork because all you have to do is look at what you're getting paid and where they view you on the cap table. And if you're doing great work and you're not being rewarded for it, I'm actually going to leave. And that's how I think a lot of startups fail is just like, if you don't have great people, it's never going to work out. I mean, to be fair, WeWork was very well capitalized and they had great investors and a great cap table too.

Mosa is not a dumb guy. great investors and a great cap table too. Mosa's not a dumb guy. But after you left, we were continued to explode in size and valuation. So watching from the outside, what were your thoughts as they reached, I think, $47 billion as evaluation at its peak? Yeah. The first thing I did when I moved out to California,

is I moved my company into a WeWork. I believed in the product, I believed in the marketplace, I believe in the first thing I did when I moved out to California is I moved my company into a WeWork. I believed in the product. I believed in the marketplace. I believe in the industry. I appreciate WeWork because it's a huge part of my journey and my career. So as I mentioned, I moved out here. I moved my company into a WeWork. We were the first enterprise customer on the West Coast in San Francisco.

We took a 75 person office in the building that I helped launch. The funny thing was like we were paying top dollar for the space and the day we moved in it was good old we work. We had missing light fixtures and things that we had paid for hadn't been installed. It was still the same kind of operation, right? Very startup. Didn't matter how much money was there. There was a lack of execution going on. And that ultimately was why I was

always going to be bearish on the company because there was no dedication to the core elements of the business, which is being the best workspace possible on earth. One of the big things that happened in the summer of 2015 once I had left is Adam had done an interview on, I think it was Bloomberg business. And it was what Adam had announced that they were going into multifamily residential, they were launching this product called WeLive. And if no one remembers, WeLive was almost like an adult dormitory, they had one down on Wall Street, and they

had one down Northern Virginia, there would be a WeWork in it. So you would never have to leave, you could live there, you could work there, it was your ecosystem. And he's doing this interview and he's sitting there with Mord Zuckerman, who is the chairman of Boston Properties. He was on the board of WeWork, I believe, big investor in WeWork, big partner of WeWork, and a believer in what was going on. And in the 30-minute interview, 27 minutes of it is, Adam is amazing, Adam is wonderful,

WeWork is fantastic, fantastic someone and so forth but in this tiny little sliver of the interview right at the end Mort goes I have a little bit of advice for Adam but I hope he'll take it he says I wish he would stay focused when he's old and got gray hair like me he can go into residential but today I wish he would just stay focused and be the best in his business and be best in class and workspace. And Adam smiles and nods and you know, in his mind, he's like, you don't know anything, I'm going to be a million times bigger than you and so on and so forth. It was the foreshadowing for everything that led to WeWork falling apart and everything I watched from the day I left in

2015 to the day, we'll call it the IPO got pulled and Adam was removed and was given the golden parachute of golden parachutes, which was like, what is this company doing? Why are they going into co-living? Why are they going into education? Why are they acquiring alternative milk companies? Why are they acquiring wave pool companies? Why are they building gyms? And I knew so many employees working there and it didn't get more sane. It got more crazy. They were renting out Universal Studios for employee parties. They rented out Madison Square Garden for employee parties.

Adam was like traveling the world to go surfing on a private jet. All at the same time, they weren't making the profit. They weren't. They had to come up with fake financial metrics. In order to explain their business, they had to come up with a financial metric called Community Adjusted EBITDA. Hi, I'm Karina Biemisterfer, host of Morning Cup of Murder, your daily true crime podcast. Yes, you heard me right. Daily true crime. Every day, Morning Cup of Murder tells you a straightforward short form story about murder, true crime,

cold cases, disappearances, serial killers, cults, and more. And I do that all in under 15 minutes. With over three years of stories and over 20 million downloads, the Morning Cup of Murder podcast has become a staple of so many people's daily routines. So, why not add it to yours? Stream Morning Cup of Murder everywhere you listen to podcasts and remember, stay safe. This seemingly legitimate term, community-adjusted EBITDA, became a symbol for WeWork's deception. By excluding massive marketing costs, it presented a false picture of profitability.

That was the only way they could show that they were making money. And the world believed it. That was what was so crazy. And then what some of my asses was like, but you still exercised your options. Yeah, I was early enough. I got them for like a dollar. Essentially, they were a dollar a share. So it didn't cost me a lot of money to exercise them. And then when someone like Masa Sun comes in and says, I'm going to pay all common shareholders, $55 a share. How could you say no? So I rode the wave. But if I have any regrets is that when we were did go public through the SPAC is that I didn't short it. So explain that you cashed out short it. So explain that you cashed out. Yeah, when SoftBank, Masa is SoftBank essentially, invested. So you bought the options for $1 a share. And then you were given $55. When you leave a company, when I left in the beginning of the middle of 2015, the standard is you

have a 90 day window to exercise your options. Some companies are more generous, but the default is 90 days. So I said, Hey, let's see what happens here. I put in a lot of blood, sweat and tears. I'm not going to walk away from the opportunity. So I paid for it. I became a common shareholder, like a gazillion other people. And when Masa came in and said, I want to invest in WeWork, part of the deal terms was that he had to offer a secondary and there was a pool of money. And I think it was again between one to two billion dollars of preferred shares, which is what the VCs get and the investors get and common shares, which peons like me got, it was pro rated. So if there was $3 billion worth of demand, only whatever that number was, one to 1.5 billion or whatever it was, would get paid out. So I tried to sell everything, right? I was getting 50 X my investment. And of course,

I got paraded. And the amazing thing was, this secondary didn't happen one time, it happened multiple times. And the big one that never happened, unfortunately, was that SoftBank was going to take a majority stake in the business and put in like, I think, $15 billion or something into the business. And that's when the shit hit the fan. That was when that deal died. Adam then decided to go to IPO. We put up the S1, which was, as some folks have said, the worst S1 in history. It all fell through. And then essentially we waited to see what would happen once Adam got fired and everything went from there. And Softbank backed out of the deal where they said they were going to buy all the shares out. And then there was the whole management change, the company's back. And then we worked out for chapter 11, they filed for bankruptcy.

And all of the leftover common shares that I had went to zero. So I lost. So how much did you cash out though? We'll call it between between 300 and $500,000. I think, you know, a lot of people that are joining startups think that they're going to be, you know, tech millionaires with their equity and, you know, oftentimes they don't have opportunities to exercise their options or they don't even realize that options are not equity and they have to pay actual money.

You can negotiate, you know, how long they last after you leave potentially. But I think a lot of people get screwed even worse than in this situation because there's not an option to cash out. So you kind of came out unscathed in this. You came out ahead. Yeah. And that's luck. I don't want to say it was skill. It was luck. I was lucky. I was early. I was lucky that the strike price was so low. I was lucky that Masa-san wanted Adam to be crazier and was willing to put an insane valuation on the business. And there's kind of two sides of the coin, right? I worked for WeWork for three years,

living in New York City, making less than $100,000. So like I was grossly underpaid for the value I was driving for the business. By the time WeWork was heavily capitalized, there were people making big time salaries. The challenge for them was they were getting options valued at $35, $40 a share. So when the company actually IPO'd, all of their common stock or their options were underwater. So they had nothing. They were going to lose money. And there were a lot of people who still believed in the business,

who exercise options in the 30s and 40s, who ended up losing a lot of money. So they were not as fortunate. And I feel terrible for them. You mentioned the S1 being that worst S1 in history. And S1 is an IPO prospectus, basically. So that was published in 2019. And I think that's when it really revealed some eye-opening details. Yes, there was a lot of eccentric things that happened. They rented Universal and had big parties and all this sort of these shenanigans. If you were making money, it would be one thing. But we saw massive losses, self-dealing. What else

specifically did you see in the S1 or media coverage that shocked or angered you the most when all of those details finally came out? I think the thing for me was, you know, the term you used was kind of self-dealing, right? Owning the trademark to the term we and then selling it back to the company for three million dollars, that kind of transaction that you had to talk about. Just the assumption that that was normal. I think that's normal behavior to do that or to own real estate and then lease it back to your company at a premium, things like that. These blatant acts of self-dealing extended beyond trademarks

and real estate. Adam Newman intertwined his personal life and family with corporate funds, even using company money to build a private elementary school for their children. You couldn't figure out where the business ended and where Adam's personal life ended. They were so co-mingled. I mean, to tell you the amount of childhood friends and family members, I mean, the fact that they started in elementary school because they felt that there wasn't a good enough school for their own children. So they were using corporate funds to essentially build their own school for their family and their friends. It just reaped of just nastiness.

Again, I just always it was like the emperor wears no clothes. It's like I would for me, I was just like screaming in the Hilltops like he's naked. He's naked, right? Like, how does nobody see this? I think what also got me so frustrated was it why did they take the S1 to show how ridiculous this business was? Because to me, I had been following it since the day I left. Elliot Brown from the Wall Street I had been following it since the day I left. Elliot Brown from the Wall Street Journal had been covering this company since 2014 and being like, something doesn't smell right here. Sure, there's always going to be the press that just takes what they're giving and follows whatever the comms person that

the company says that's always going to exist. But there were actual really intelligent journalists covering this business for a long time who were screaming to the world, there's something rotten in the state of Denmark. And for some reason, the world finally came around to it once they saw this ridiculous document that showcased that they were spending, you know, $2 for every dollar that they earned, that their succession plan really didn't exist, and that they were investing in businesses that had no after-profit ability. and that they were investing in businesses that had no path to profitability. So the IPO collapsed. Adam Newman stepped down. You said that he had this golden parachute of sorts.

Can you talk about that deal and how it made you and other former WeWork employees feel? Yeah, again, another testament of and just reality of the 2010s were these ideas of, you know, super majority voting shares, right? These companies got structured by founders so that if anything was going to happen to the founder, that they would have to be not compensated grossly, heavily compensated. And Adam had all the voting power. So in order to get rid of him, they had to pay up. And I mean, I can't even go through the lonely list

of things that he got, but you know, I think part of it was like at least $500 million in cash, immense loans made to him. In the end, his package was at least a billion dollars all in, and even like potentially the option to come back at some point, you know, with the board's approval. It was crazy what they had to give to him. The dramatic end of Adam Newman's reign over WeWork came with an outrageous price tag.

This personal windfall for the disgraced CEO stood in stark contrast to the massive layoffs that followed, a devastating reality for thousands of employees. What happened next was what always happened. 10,000 people lost their jobs. All of the egregious and ridiculous business lines were shut down. I know a company out here in San Francisco, it was like a small 10 person startup that got acquired so that it could become part of the elementary school that Adam and Rebecca were starting. Wegrow was what it was

called. Everyone moved their entire lives from California to New York. And in six months, it was gone. It was vaporized. And I felt really bad for them. I met a lot of people out here out West who had heard about me. This is like circa 2017, 2018, and then I go work for WeWork. What do you think? I'd say stay away. You're not going to get the professional development you're looking for. You might get compensated pretty well, but it's not going to work out. We get caught up in these fairy tales of these founders and their businesses.

And we just don't want to look at the basics. And to me, when it comes to business, there is one really core tenet. And that's do you make more money than you spend? Can you generate a profit? And I don't mean made up financial metrics, I don't need how poor believe like, oh, well, we could be profitable at any point, we just have to turn off the growth switch. Are you making more money than you spend? And we work would never answer that question directly. You know, they would say, Oh, well, within the four walls of the

business we do. Well, okay. But do you make more money than you spend? How are you going to get the profitability? How are you going to do this? If there was anything that was satisfying was that the lies were finally over. For me, it was like a solid six or seven years of just lying It's not telling the truth. And the truth always comes out. And it did. And when you talked about this community adjusted EBITDA, just to decode that EBITDA essentially is profit. So when companies report these profits, if they're community adjusted, you're basically trying to show that you have profits minus some other sort of spend that's normally

not included. So it's like fuzzy accounting, fuzzy math. Essentially what they were doing, they had to come up with their own financial metric to demonstrate profitability. What Community Adjusted even did is it essentially subtracted all of it, just excluded all of their marketing costs. Right? I'm just like, that's your customer acquisition strategy.

And what were they doing? They were spending hundreds of millions of dollars on marketing. There were a few intelligent people out there who were like, this is insane. This is crazy. Just tell us the real numbers. There were just all these little stories that kept on popping up. I mean, they were buying the Lord and Taylor building for like $850 million on Fifth Avenue.

They were doing this huge project at the Brooklyn Naval Yard, you know, and they were going to start going into woodworking and machinery and all this like crazy stuff. They were starting magazines and like print. And after a while, you were just kind of pulling your hair out just wondering when was the shoe going to drop finally dropped and it did. It was the shoe gonna drop, finally drop? And it did. It was a miraculous implosion, right?

I mean, think about what happened, multiple books, documentaries, I mean, a TV show starring Jared Leto and Hathaway. Why do you think there was such crazy erratic behavior? Was he on drugs? What was going on? Yeah, that's a funny storyline that has gotten pushed that you know, autumn is some kind of drug field maniac. I don't buy that. Adam

is a normal person. He likes that. Have a good time. He you know, he likes tequila. He smokes a joint once in a while. It is what it is. I think it's a bigger issue. I think it's that Adam's a fucking narcissist, right? I think Adam genuinely believes that he is some kind of God, that he is just greater than the rest of us. It was just how far he would take it, how far he would go to tell his story to make people believe that this thing was bigger. I mean, we talked earlier about Billy McFarlane. There isn't much of a difference between Billy McFarlane and Adam Newman except Adam is a thousand times better than it

than Bill. But it's the same mentality that Bill is a criminal. I will never go as far as saying Adam is a criminal. They believe in themselves way too much that they'll take it so far. They have no problems lying to your face. It's a super, super fine line. And what I care most about is people that are joining startups discerning some of these very specific terms when they're looking at their overall comp package, cash versus equity or options or asking questions about shares outstanding or liquidation preferences or

all these like very technical things that got a lot of later employees screwed. And also you want a founder who has charisma and has this vision and can get investors on board. So where is that fine line? It's really, really fraught with nuance. Because there's the opposite of the spectrum. I've met people who work at startups. It's like, oh yeah, we've got this founder and CEO, but they can't sell the product. They're either too technical or they're not motivational. They don't get people inspired. Totally understand. That was like kind of Adam's secret sauce, right? He'd come into a

room and he'd get everybody riled up because we were changing the world. I think obviously it's different on a case by case basis and the company you're working for. I think for me, I just don't want to be lied to, right? I just want the truth. When things are good, we can celebrate it, but when things are tough, let's go for it. I mean, could you imagine working at a company who's part of their slogan was like,

thank God it's Monday, making you stay at the office till 9 p.m. on a Monday to drink Kool-Aid and hang out? It was crazy. And if you didn't buy into it, you were like a non-believer. Like that's how far it kind of went. I think the challenge that I also have is this concept of like, get on the rocket ship, we're all going to be rich.

But the problem with that person who joins the company doesn't really put it into perspective and realize like, you don't have the same share that the person who started this, and nor should you. That's the thing is I'm not saying like, oh, I should have had what Adam had. Adam started the thing. Of course he did. But when you go into that meeting, you're like, hey, so where did I stand?

Where do I stand? What do I really have here? What's the value of this? What does everyone else have? And they go, stop. Stop. Stop asking these questions. It's a red flag.

So for that person who is out of startup or like ask basic questions that everyone should tell you and if they don't tell you the answer are they up to state or they work around it then you know there's a problem the company i came to in california i asked all those questions i got really honest answers so i know there wasn't a problem they told me the outstanding share count. They told me everything about their current fundraising and where they were going. I mean, you never knew when we were raising money. I mean, you knew we were raising money, we're bringing investors through all the time, but you never knew when we closed around the financing until the press reported about it. It was just like one of those things. I mean, I can't

imagine what it was like working at that company when everything was going down with the ipo i know for a fact they weren't being told what was really happening. They all found out that adam was being removed by the board from the press. And then of course they had a big town hall and everything's gonna be fine and here's marcelo from soft bank and we're still moving forward and so on. I mean it's a never-ending cycle. And that's a cultural thing. And I talk about this all the time with folks in startups. There's a really thin line between culture and cult. In the early days, WeWork was a culture and eventually the money was the problem, right? All the capital and all the pressure slipped it to a cult pretty quickly. Because when you're raising that kind of money, you need a huge, huge return to make it worth it for investors.

Looking back, what do you think is the biggest takeaway or lesson that you got with everything that went down with WeWork? For me personally, stick with my gut instinct. Everything I saw was real. Everything I believed was true. And that's both on the positive and negative. I wasn't going to be fooled by someone like Adam. I had solid emotional intelligence and I could figure out when I was being lied to. But the other thing, again, I'm very grateful to WeWork for is it inspired me to start my own business. I run my own workspace and events based business here in San Francisco. And to be grateful in that even though I had probably a net negative experience at the company, it still inspired me to build something else and to take something else on and to start my own entrepreneurial journey.

And therefore that even from a negative experience, something positive can come from it. I made some solid relationships. I also too was able to travel the world. I also was able to make a little bit of money that I put into my business so I could start it up. I mean going through such a roller coaster this early thrill, the crushing disappointment, how do you think it affected your view on loyalty and fairness and startup culture or how did it shape you as an entrepreneur yourself? It's funny because the company I came out to in San Francisco, I was a huge believer.

I gave a lot of time and energy to it. And I think that experience, along with the WeWork experience, really has changed my feelings about startups. I'm pretty cynical about the culture around startups these days. I'm pretty cynical about the culture around startups these days. I think people should view them as what they really are. It's just a job. You should give 100% effort. You should dedicate whatever you want from it and to it. But at the same time,

in 24 hours, they could call you up, they could fire you, and you could lose your job. But that's okay because it's just a job, right? It's not your life. If you want it to become your life, start one yourself. And then you can have all the equity and you can have a big payout down the road potentially, and it can become yours. And that was the thing for me. I was tired of being another cog in the wheel.

I wanted to be the wheel. So I started my own thing. I was put up or shut up. But I think that is something that I will never forget and I'll never do again. If I ever get in the situation of working for a startup, another company is kind of going in too deep. Even what happened to me, we were there were times I was like trying to scream to the world that I was screaming to avoid like folks like we were being lied to all the time. And as weird as it

sounds like, like caring too much. If that makes sense. I use this line in a recent talk I did. One of the greatest basketball players of all time, his name was Bill Russell, played for the Boston Celtics. He won 10 championships, one of the greatest athletes of all time. He has a famous quote. He says, basketball is what I do, but it's not who I am. And what's happened in the 21st century, because of the Googles and Facebooks, and even the WeWorks, is that our identity is tied to the companies that we work at. It's who we are. And I think there's more to us than that, than where we work, who our employer is, right? And especially in cities like San Francisco and New York, it's the first thing comes out like, where do you work? Where do you work? Where do you work? What do you do? What do you do? There should be more to us

than to our identities than just the startup that we're at. And again, it doesn't mean you shouldn't take your job seriously. That doesn't mean you shouldn't care about the work that you put out. But if you're giving up your family life, because someone needs you to email them at 1130 at night, hey, here's my message for you. That email can wait till the morning. If you're giving up time with your friends because your boss is bothering you about something that can, on a Saturday, that can wait till Monday, let it go till Monday.

And if you lose your job over it, it's worth it. Because anybody who's gonna tell you that your personal life or what matters to you isn't as important as this job, it's not. I remember there were times that we work, or even times at the, the other startup I worked out here in San Francisco, where I was like frantically worried about losing my job in my own head.

I guess it's a form of imposter syndrome or whatever it may be. And then I worry about the things that I might have neglected time with my family, time with my friends, time for myself over like we work. I really like say the thing. It can wait till Monday. There's more to your life than work. There's more to your life than the quote unquote culture of the startup that you're working at.

What's come to me after over a decade in this ecosystem is, it's to kind of be able to step away and separate myself from these companies while still demanding excellence for my performance. Between WeWorks leadership and the investors, where do you ultimately place blame, if at all, for how things turned out for rank-and-file employees who gave it their all? I'm questioning it's a lot of his fault, hands down. He structured the company that the buck stopped with him. Every decision made was his. I think everything that happened to the brand,

everything that happened to the business, everything that happened to the lives of those employees, the buck stopped with one person. And that's the person who made out. That's the sad part, is that for all the sadness that happened, he got away pretty unscathed, despite his quote unquote reputation. And why do you think people keep

giving him money? To use his own terminology, what's your superpower, right? That was Adam's and Rebecca's thing. What's your superpower? His superpower is he can sell. There's a, I think also in that ecosystem, there's the belief that if you've done it quote unquote once, you can do it again. We see it all the time, right? We see there's a big thing in the VC world of the repeat founder, who you've done it. That means you can do anything ever again, you're only going to be success, in my opinion, because there's lock tight, which right and that's that's the other thing that people also don't realize about WeWork is that WeWork was

a wave that got written pretty well. But Adam was a failed entrepreneur before this, right? The collapsible heel, the baby clothing company, these were just ideas that went nowhere. WeWork was able to become what it became because of the financial crisis in 2008. That collapse was enormous for WeWork's ability to get off the ground. Massive vacancy in commercial real estate, huge opportunities to take on spaces across New York City that were vacant for a really long time. Now at the same time, he executed, right? He built a really exciting brand, he built energy, but also there was this other cultural change that was going on in 2008, 2009, 2010, and that was the revolution against Wall Street

and corporate America. Occupy Wall Street. People didn't want to go work for traditional corporations and startups were hot. And when there's unlimited coffee, a keg on every floor, and a fun party-like atmosphere, you're probably going to join up. Yeah. Thank you so much. I appreciate it. Thank you so much for being with us today and being so open about your experience. Thank you so much for listening. I'm your host, Nicole Lappett.

Scams, Money and Murder is a Crime House original. Join me every Thursday for a brand new episode. Here at Crime House, we want to thank each and every one of you for your continued support. If you like what you heard here today, reach out on all social media at Crime House.. And don't forget to rate, review, and follow Scams, Money & Murder wherever you get your podcasts. Your feedback truly makes a difference. And for ad-free listening plus early access and bonus content, subscribe to CrimeHouse Plus on Apple Podcasts. Scams, Money & Murder is hosted by me, Nicole Lapin, and is a CrimeHouse original powered by PAVE Studios. Our guest today

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