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WeWork Used These Documents To Convince Investors It’s
Worth Billions
What the $10 billion co-working company’s internal financial documents tell us about how a decacorn is built.
posted on Oct. 9, 2015, at 11:44 p.m.

Nitasha Tiku
BuzzFeed News Reporter

Tim Lahan for BuzzFeed News

https://www.buzzfeed.com/nitashatiku/how-wework-convinced-investors-its-worth-billions?utm_term=.wxPq6lqmb3#.dtOzbkzBPA

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9/29/2016

WeWork Used These Documents To Convince Investors It's Worth Billions - BuzzFeed News

Startups don’t turn into unicorns — the buzzword for companies valued at a billion dollars
or more — without a good story attached. For WeWork — which leases office space,
divvies it up into desk-sized chunks, and rents it out month to month, largely in
fashionable cities like San Francisco and New York — the narrative revolves around
catering to a new generation of young workers who want to be creators and collaborators,
not office drones. It’s that promise of personal fulfillment that allows CEO Adam
Neumann to claim that his company’s short-term subleases are “changing the way people
work.” Business is going so well that soon, the five-year-old company expects to change
the way people live, too, by offering shared residential micro-apartments under the brand
name WeLive.
Investors are bullish on the tale. The company has raised $1 billion in less than half a
decade, and its valuation has grown commensurately. In February 2014, WeWork’s
financiers said it was worth $1.5 billion. In December 2014, a new set of financiers
pumped that number up to $5 billion. Half a year later, most of those same investors
injected another round of funding that doubled WeWork’s valuation to $10 billion. At that
price, WeWork is one of the most valuable startups to emerge from the tech boom, more
valuable on paper than Slack, Draft Kings, Lyft, 23andMe, and Warby Parker combined.
Even in a technology cycle whose “defining characteristic” is mega-financing rounds —
where investors pour hundreds of millions in funding into a company on the chance that
it will be worth billions — WeWork’s rapidly multiplying valuation (an appraisal of a
company’s worth by its investors) has perplexed and alarmed observers. The New York
Times, the Wall Street Journal, and even random bystanders on Medium have scratched
their heads wondering how free beer and flexibility could add up to a $10 billion business
model. “Believe It” read Wired’s dubious headline about the company’s $5 billion
valuation last year. Writing in the Commercial Observer last month, Charles Clinton,
CEO of the real estate investing company EquityMultiple, called it “perhaps the most
polarizing recent valuation … many [real estate] industry insiders find the gaudy
valuation to be completely insane.” CompStak, the commercial real estate database, said it
felt compelled to investigate WeWork’s margins, because “[l]ike many in the CRE
industry, we were curious to understand the math behind WeWork’s fast growth.”
Neumann likes to present WeWork as a star of the sharing economy, a technology
platform that connects consumers to office space, just like Uber and Airbnb connect them
to cars and homes, respectively. But how can an infrastructure-dependent real estate
venture scale like a low-overhead software startup? How can a company that signs 15-year
leases — but sells monthly memberships — expect to survive a downturn? How can an
entity that doesn’t own its own real estate be “worth” more than three times as much as
the New York Yankees? Why does WeWork’s future look so bright when it sits smack in
the middle of two bubbling markets (that is, tech and commercial real estate)? Why would
a business model that drove one high-profile dot-com darling promising “the office of the
future” into bankruptcy succeed this time around?

https://www.buzzfeed.com/nitashatiku/how-wework-convinced-investors-its-worth-billions?utm_term=.wxPq6lqmb3#.dtOzbkzBPA

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if it sounds like the upside is Uber-sized. All told. investors such as Goldman Sachs. WeWork forecast 376 shared office location in 2018. So these documents are less useful as a peek into WeWork’s current financial state than they are as a snapshot of a high-profile company on its way up (and up. After reading these documents. the fundraising documents portray a company on a phenomenal trajectory. The material was shared with BuzzFeed by someone familiar with the company. The number of co-working members were to set to explode from 16. membership.9/29/2016 WeWork Used These Documents To Convince Investors It's Worth Billions . and up) in a moment when investors are flush with cash and open to any company with the faintest veneer of technology.buzzfeed. it’s that WeWork has mastered the kind of storytelling that locks down massive rounds and can earn what is essentially a real estate company the privilege of being discussed as — and valued like — a nimble Silicon Valley software startup. the company predicted operating profit of $941. as well as a company overview. both embedded below. WeWork has raised yet another $433 million (mostly from the same firms). Based on data from WeWork's five-year forecast (page 1). and JPMorgan handed WeWork $355 million in funding. while occupancy hovers just below 100%. and locations grow at an enviable rate. its predictions have changed significantly. along with the $5 billion valuation. In the interim. Profits. But the material also reveals that WeWork relied on enormous demand projections and certain accounting tricks — both of which are popular tactics among private companies — to keep its profit margins looking as high as its aspirations. This material was prepared a year ago. Since sharing this data with investors. as have some of its business practices.000 in the same time period. WeWork would only comment on a couple of aspects of its fundraising pitch. By 2018. Indeed. It includes a five-year financial forecast and a slide presentation (also known as a pitch deck). None of this is unique to WeWork — that’s precisely the point. Its business model is atypical for tech. up from 24 in 2014. but the https://www.2 million from revenue of $74. WeWork expected operating profit of $4. as part of its Series D funding round in December 2014.wxPq6lqmb3#. and independently verified.dtOzbkzBPA 3/24 .BuzzFeed News October 2014 fundraising documents obtained by BuzzFeed News reveal how Neumann answers those questions behind closed doors.86 billion.6 million by the end of 2014. on the condition of anonymity.com/nitashatiku/how-wework-convinced-investors-its-worth-billions?utm_term=. if these documents tell us anything.279 to 260. Harvard University. The story is a good one.6 million on revenue of $2.

WeWork publicizes only metrics that paint the company in a better light.BuzzFeed News economic and cultural practices that made it a $10 billion company pervade Silicon Valley. where valuations can double in a matter of months and where investors who are so “desperately afraid” of missing out on the next unicorn will slap a horn on a horse. hockey stick– like projections.com/nitashatiku/how-wework-convinced-investors-its-worth-billions?utm_term=.” “They have extraordinary.” https://www. Background photo courtesy of WeWork minutes and 44 seconds on average flipping through a pitch deck. It offers a glimpse into the dealmaking behind a “decacorn” — the latest Silicon Valley jargon for a $10 billion company. Ultimately. highlighting WeWork’s use of accounting practices that make rent look lower in the near-term and shove off expenses further down the line.dtOzbkzBPA 4/24 . To its detractors. at least.” Fundraising documents are designed to dazzle. “our large institutional investors have access” to “audited financial statements.” Eric Sussman. Investors spend only three Based on data from WeWork's five-year forecast (page 1).buzzfeed. But like most private companies. WeWork is the poster startup of a funding climate fueled by FOMO and driven to extremes. But they seem very. senior lecturer of accounting at UCLA’s business school and chair of the investment management firm Causeway Capital. told BuzzFeed News after being shown the documents.wxPq6lqmb3#. so companies have to make the future look big and bright. The Information concluded that these practices could make its forecast “tough to meet. and another term that gets tossed around with little irony about the kind of magical accounting it may take to conjure up so many mythical beasts. so skeptics have relied on back-of-the-envelope math and gut-level instinct. WeWork’s presentation (published for the first time below) is perhaps our best clue to understanding how startup valuations get made. very aggressive. a WeWork spokesperson told BuzzFeed News that when it’s time to actually cut the check. In fact. “Which in and of itself is not uncommon.9/29/2016 WeWork Used These Documents To Convince Investors It's Worth Billions . Michelle Rial/BuzzFeed The Information first reported some of the financial data in these documents in late August.

9/29/2016 WeWork Used These Documents To Convince Investors It's Worth Billions . jokingly referring to the optimistic projections in slide after slide of WeWork’s pitch.buzzfeed. These concessions.BuzzFeed News In other words. WeWork is relying on additional revenue from raising office rents.dtOzbkzBPA 5/24 . collecting commissions off its real estate deals. WeWork is pursuing a different strategy: negotiating with landlords for considerable concessions. but instead takes long-term leases in centrally located neighborhoods in gateway cities. detailed in the 2014 documents. it has to charge members more than it pays landlords.wxPq6lqmb3#. WeWork started leasing office space in 2010. Now that the market is hitting record highs. https://www. So in order to make a profit. But the initial presentation gets them into the funding groove. investors are shown two presentations: one that uses standardized accounting practices and one that doesn’t. From WeWork's pitch deck (page 33). “It’s the best deck I’ve ever seen!” one tech executive told BuzzFeed News. when the commercial real estate market had yet to rebound after the 2008 financial crisis.com/nitashatiku/how-wework-convinced-investors-its-worth-billions?utm_term=. and signing people up for its co-living product. according to the documents: The company doesn’t own real estate. Here’s how WeWork works. selling services like health care. include reduced rent.

BuzzFeed News periods of free rent. but WeWork keeps the upside. In exchange. Kessler. And when the free rent ends. and infusions of up-front capital to build out and refurbish locations. long leases and number of new leases mean that even a five-year forecast won’t show potentially significant jumps in cost.) In WeWork’s financial forecast.wxPq6lqmb3#. From WeWork's pitch deck (page 16). WeWork refers to these profit-sharing deals as “asset light. That’s the nice thing about a billion-dollar price tag — it opens a lot of doors.dtOzbkzBPA 6/24 . as David A. “Asset light” now means the company get about 75% of the cost of build-out covered by the landlord.9/29/2016 WeWork Used These Documents To Convince Investors It's Worth Billions . (WeWork has since pivoted away from the profit-sharing aspect or below market rents. which call for the discounts to be divided up over the length of the lease. expenses go up. concessions like free rent are not stated using standard accounting practices (GAAP). the documents state that WeWork would share 25 to 50% of its profits with landlords.” in both the fundraising materials and in the press.com/nitashatiku/how-wework-convinced-investors-its-worth-billions?utm_term=. national director of commercial real estate for the accounting and advisory firm CohnReznick. WeWork’s extraTable uses data from WeWork's pitch deck (page 16). CompStak analyzed 21 of WeWork’s leases in New York City and found that 17 lasted more than 15 years. WeWork instead accounts for it all at the beginning. Landlords have been willing. told https://www.buzzfeed. and take longer leases than is normal. including six leases signed in 2015. This accounting strategy gives WeWork “higher income projections in the early years” of a location. but their weightlessness is debatable.

is not a name brand. compared with 16% for Regus. which tends to obsess over numbers. But the two companies are peers only in the broadest sense of shared office space. Valuations are a story about the future — and no one knows what the future holds. relying on a massive growth in members and a bump in the amount that those members will pay. Kessler pointed to rising revenue per square foot — an increase he called “unusual. Taxes.wxPq6lqmb3#. The same principle follows for other concessions: Landlords fronting the cost of building out a location make WeWork’s initial costs appear artificially low. Even the most iconoclastic Silicon Valley companies are still lined up against their competitors in order to estimate future potential. Yet despite increasing costs.dtOzbkzBPA 7/24 . Relying on optimistic numbers is de rigueur for startups. Regus. companies like Uber can keep raising massive funds from the private market. that’s Regus. according to Sussman. Kessler said. Regus isn’t ‘roided out with a $1 billion investment. WeWork forecasts that its margins will rise. while investors are still unicornhunting. but you won’t see that term or figure in audited financial statement.BuzzFeed News BuzzFeed News.com/nitashatiku/how-wework-convinced-investors-its-worth-billions?utm_term=. Depreciation. Kessler explained: WeWork is simply using landlords to help while it builds up a revenue stream. WeWork’s unique financing deals are great for cash flow.buzzfeed. and the vast majority of startups avoid those rigorous standards until an initial public offering exposes them to SEC oversight. and Amortization — which. Sussman pointed out that even a popular company like Netflix will have to spend more to get “that 50 millionth American.” Essentially. which went bankrupt in the year 2000. saving themselves from the scrutiny of Wall Street. and no one’s wearing Regus-branded T-shirts or going to Regus summer camp — which is partly why all of the experts BuzzFeed News consulted had a hard time assessing whether WeWork’s margins were sustainable. WeWork’s documents also make frequent reference to EBITDA — a financial initialism meaning Earnings Before Interest.9/29/2016 WeWork Used These Documents To Convince Investors It's Worth Billions . https://www. WeWork claims its unit margins are 44%. In WeWork’s case.” But WeWork can’t predict demand. “[WeWork] must believe that demand will continue to increase in order to drive the rates. For example. a publicly traded corporation that lets tenants make temporary offices look like traditional ones.” The company further boosts its margins by predicting that its marketing and payroll costs will dwindle as a percentage of revenue — despite its ambitious expansion and a growing number of smaller competitors. is commonly “used in banking and valuation.” Private companies are not obligated to use GAAP. Moreover.

wxPq6lqmb3#.” WeWork argues that it has a number of “global macro trends” working in its favor. head of industry relations for MIT’s Center for Real Estate. “Today’s modern workforce is increasingly independent and has fundamentally different needs. “What happens when your whole business model is based on being hip and you’ve got to re-hip it?” Steve Weikal. and what’s the cost? I doubt that landlords will be paying for that the next time around.9/29/2016 WeWork Used These Documents To Convince Investors It's Worth Billions . with a preference towards flexibility and a willingness to share space and services. asked BuzzFeed News.BuzzFeed News Screenshot from WeWork's company overview. WeWork expects its occupancy in a downturn to dip to 85%. “Commercial real estate is a very large asset class.” From WeWork's pitch deck (page 25) WeWork’s vision for what will happen to these trends in lean financial times is sunny to the point of blinding. including an increasing percentage of the workforce going freelance.buzzfeed. it is highly fragmented and predominantly caters to larger companies. In the slide below.” a WeWork spokesperson told BuzzFeed News.com/nitashatiku/how-wework-convinced-investors-its-worth-billions?utm_term=. “You’re supposed to be at the leading edge of cool. https://www. which is what Regus gets in a good economy. and the shrinking usage of corporate real estate. They also enjoy the social and business benefits of being part of a broader community which WeWork offers.dtOzbkzBPA 8/24 .

9/29/2016 WeWork Used These Documents To Convince Investors It's Worth Billions . Now venture capitalists are contemplating raising Data for WeWork rent from CompStak report (June 2015).wxPq6lqmb3#.BuzzFeed News Screengrab from WeWork's company overview.” For example. That’s not a bad thing.” Sussman said. WeWork should evaporate when the tech bubble bursts because its co-working spaces are filled with tiny startups that will eventually either run out of funding or return to the coffee shops and home offices from whence they came. the ‘show me the money’ financial statement. who will want to downsize if times get tough. “It’s the holy grail. WeWork also insists that it will retain “cost-conscious members.dtOzbkzBPA 9/24 .com/nitashatiku/how-wework-convinced-investors-its-worth-billions?utm_term=. All these vagaries are what make the cash flow statement (below) so crucial.” pointing out that it launched in a downturn. But back then.com their own real estate fund for live/work spaces so investment dollars can’t be siphoned off by WeWork. said Sussman. “Growing companies usually bleed money. At face value.buzzfeed. competition offering the same sleek aesthetic was slim.compstak. / Via blog. https://www. The company counters that it’s diversified into industries beyond tech and brought on larger tenants. WeWork would have ended 2014 with a net negative cash flow of $78 million if not for a $101 million infusion of capital.

https://www. Profits look less certain when you read the fine print: Each location is shown “at maturity.9/29/2016 WeWork Used These Documents To Convince Investors It's Worth Billions . the fundraising documents were quiet on the question of present-day profitability (WeWork’s operating profit for 2014 was a slim $4.wxPq6lqmb3#.” even though almost half launched earlier that year. Profitable Business Model. which likely means that WeWork didn’t factor in the initial costs of construction and development.com/nitashatiku/how-wework-convinced-investors-its-worth-billions?utm_term=.dtOzbkzBPA 10/24 .2 million).BuzzFeed News Cash flow statement from WeWork's five-year forecast (page 2). Indeed. looking at unit economics instead.buzzfeed.” From WeWork's pitch deck (page 10). Take this impressive slide about WeWork’s “Proven.

” Input in. Two sources familiar with the company’s business plan told BuzzFeed News that Neumann tells his investors that co-living will one day be a bigger part of the business than co-working. “Key metrics like membership growth.dtOzbkzBPA 11/24 . pivot out.” one tech company executive told BuzzFeed News.wxPq6lqmb3#.9/29/2016 WeWork Used These Documents To Convince Investors It's Worth Billions .” so founders know to frame current https://www.’” The basis for WeWork’s five-year forecasts.buzzfeed.” Sussman told BuzzFeed News. According to the documents. he said. “I always say. Change those inputs and everything changes. ‘If you gave David Copperfield or Harry Potter Microsoft Excel. “It’s a bit of a trope.BuzzFeed News From WeWork's five-year forecast (page 1).com/nitashatiku/how-wework-convinced-investors-its-worth-billions?utm_term=. the company’s upcoming leap from office to home. “You put together a model. These slides show how easy it is to create a good-looking growth curve — not just for WeWork. “Investors want to hear a story. WeWork’s biggest gamble of all appears to be WeLive. pricing. It spits out whatever it spits out based on the inputs. they could do even more amazing magic. and square footage leased drive the whole model. but for all of its peers in the current tech climate. all rests on its assumptions. A big reveal like that is part of the show.

WeLive tenants could pay $6. which is set to double to $100 a month by 2018.2 per square foot in 2018. WeLive is expected to supply 21% of the company’s overall revenue by 2018 — even though it has yet to launch — and bring in $605. Locations were slated to open in October and November. The price goes up if you include WeLive’s “services” fee. projected earnings from co-living depend on a steady stream of customers willing to sacrifice privacy for proximity to like-minded people. But its micro-apartments may actually be more expensive than their nonbranded counterparts. https://www. but a source close to WeWork says it was pushed to the end of the year.9 million in annual revenue three years after its debut.BuzzFeed News plans as merely the beginning.9/29/2016 WeWork Used These Documents To Convince Investors It's Worth Billions .dtOzbkzBPA 12/24 . From WeWork's pitch deck (page 30).buzzfeed. according to the real estate database Zillow. but that’s a tough sell when more millennials are moving back in with their parents even as the job market improves.wxPq6lqmb3#.5 per square foot in 2015 and up to $7. Part of that calculation is premised on the idea that WeWork is cheap: WeLive promises 36% savings on annual housing costs. which lists 276 square feet per available bed. Much like WeWork’s office-rental arm. “What’s bigger than working? Living!” the executive explained. The company would likely argue that price per square foot doesn’t factor in shared space like a rooftop lounge. Based on WeWork’s forecast.com/nitashatiku/how-wework-convinced-investors-its-worth-billions?utm_term=. Monthly rent in Manhattan’s Financial District (the site of the second WeLive location) is $5 per square foot. According to the documents.

hey. The hourly price for conference rooms increases during peak hours.” one tech investor (who has not funded WeWork) told BuzzFeed News. WeWork’s cost-effectiveness claim is debatable for its office space as well. and convenience. Its starter package of $45 a month buys one day of free desk space per month and charges $25 an hour for conference rooms as well as $50 a month to use WeWork as a business address. That may be why WeWork’s investors are nonetheless on board for Neumann’s grand plan. just like Uber cars. internet. once you factor in cleaning.” as WeWork’s neon sign says. Financiers in search of the next big thing still think there’s an untapped market of apartment renters who care less about personal space and more about the perks of a built-in social network.wxPq6lqmb3#. The investor thinks that the idea of a “rich guy commune” will be huge — “but.9/29/2016 WeWork Used These Documents To Convince Investors It's Worth Billions .dtOzbkzBPA 13/24 . but an on-demand office is worth it for entrepreneurs who want to “Do What You Love.com/nitashatiku/how-wework-convinced-investors-its-worth-billions?utm_term=. I’m single.buzzfeed. The company says it saves tenants 25% on a standard office lease.BuzzFeed News From WeWork's pitch deck (page 29). “I’d live in a living room with just a kettle and a fridge if I could use a big kitchen sometimes.” https://www. but the markups add up. one source told BuzzFeed. Tenants are well aware that it’s “scandalously priced” per square foot.

buzzfeed. And your narrative should impel would-be investors to look away from short-term profitability and instead gaze upon the mammoth size of the potential market (often one of the more cringeworthy slides in most pitch decks.9/29/2016 WeWork Used These Documents To Convince Investors It's Worth Billions . It should swear that it can scale on software alone (that’s why Uber insists it’s not in the transportation businesses — even as it develops driverless cars).) The framework of WeWork’s fundraising documents fits the formula perfectly.” “Investors are not solely evaluating your company’s story. His top reason was the “importance of narrative. Your destruction target should be framed as a stodgy industry just aching to be upended by increased efficiency. WeWork says it can get $1 billion in annual revenue with just 1% penetration in key cities — but a closer look reveals that WeWork has a very broad definition of potential customers: every single company with up to 100 employees in “industries that use office space” and 20% of companies that have 100 to 5.wxPq6lqmb3#. There’s a formula to the narrative Gurley and the rest of his industry reveres.” he said. you can convince freelancers to pay $450 a month for a desk. with references back to its techsavvy user base throughout.com/nitashatiku/how-wework-convinced-investors-its-worth-billions?utm_term=. basically anything but Regus. https://www. venture capitalist Bill Gurley wrote a blog post about why pitch decks rule. WeWork also refers to itself as a subscription model — From WeWork's pitch deck (page 2).” a play on software-as-a-service companies like Salesforce. such as young people and/or citizens of the developing world.” If you can convince Goldman Sachs that micro-apartments are the next Snapchat. And just as Uber won hearts and minds by proving that demand for its service is not limited to the size of the taxi market. “MILLENNIALS ARE REDEFINING THE WORKFORCE.dtOzbkzBPA 14/24 . “They are also evaluating your ability to convey that story. WeWork describes itself as “space as a service.” the company proudly shouts at the beginning of the deck.BuzzFeed News In July. In one slide.000 employees. Your company should appeal to coveted customers. and then you can convince CocaCola that it really needs to start co-working next to these creators.

Since then.wxPq6lqmb3#.dtOzbkzBPA 15/24 . WeWork has more than doubled from 23 locations to 52. because building and shipping software is relatively cheap and easy compared to making physical products. Tech startups command much higher multiples. but that multiple is still https://www. WeWork can make a credible claim to all these characteristics.) To figure out a fair multiple.buzzfeed. WeWork’s ability to graft this formula onto office space subleasing may have baffled real estate insiders. That matches what Neumann told the Wall Street Journal in December.BuzzFeed News From WeWork's pitch deck (page 18).9/29/2016 WeWork Used These Documents To Convince Investors It's Worth Billions . but the story is so compelling because we’ve been watching it (occasionally) come true — and no one ever got mega-rich on a safe bet.com/nitashatiku/how-wework-convinced-investors-its-worth-billions?utm_term=. but by punctuating its pitch with buzzwords like “sharing economy” and “asset light. A company’s valuation is often calculated based on a multiple of its earnings. Based on operating income from 2015. WeWork’s $5 billion valuation was 100 times its earnings.” the company has been able to hide out in the “startup” sector. (That’s part of why WeWork calls itself a tech company and not a real estate company. investors look at how competitors are valued — which may be why one of WeWork’s board members is fond of comparing it to Chipotle and Uber.

buzzfeed.wxPq6lqmb3#.” he argued. the Wall Street Journal reported that startups were playing “the numbers game” by sharing inflated stats that “far exceed actual revenue. From WeWork's five-year forecast (page 1). WeWork and its cohort of decacorns could find successful business models and still not grow into their valuations. In June. Real estate investors. Potentially misleading financial metrics were a hot topic this summer. current results offer a clearer picture of potential. for example. it’s common practice to include puffier metrics. of course: When you’re growing at hyper-speed. everyone is overestimating market share and pushing assumptions. But in order to bring those multiples down to earth.9/29/2016 WeWork Used These Documents To Convince Investors It's Worth Billions .” only to deflate once the company goes https://www. “These companies may have ideas that work.BuzzFeed News stratospheric: Office-space landlords often trade at a multiple of 18 to 20 times earnings. It’s not all froth and games.com/nitashatiku/how-wework-convinced-investors-its-worth-billions?utm_term=.” Solomon name-checked WeWork as an example of this trend. In December.” In other words. “But more likely. pay more attention to cash flow because it reflects what a company will be able to generate.dtOzbkzBPA 16/24 . and Regus trades at around 13 times operating income. law professor and author Steven Davidoff Solomon wrote that investors have been willing to play along with aggressive assumptions just to secure “the privilege of investing” during the “frenzy to find the next Uber” in which companies are “priced to perfection.

In an analysis of WeWork’s $10 billion valuation. “Investors are assuming that the numbers they see in the fund-raising deck are the same as those they might see” in a heavily scrutinized IPO filing. Six months after the funding round from these documents was announced.com/nitashatiku/how-wework-convinced-investors-its-worth-billions?utm_term=.” Mutual funds have been investing in startups so aggressively recently that Fortune wondered if it wouldn’t start affecting retirement funds. Gurley said late-stage investors “have essentially abandoned” traditional risk analysis. a decline in the number of square feet reserved for each employee. Sussman emphasized that Boston Properties and WeWork’s other institutional investors are “very sophisticated. At some point. which invested in WeWork’s last round. Rowe Price Associates.dtOzbkzBPA 17/24 . to earmark “a fraction of a percent of their cash” toward “building a unicorn portfolio. technology analyst Ben Thompson said it made sense for funds like Fidelity. this is how it’s supposed to work.buzzfeed. They may be hungrier for a hot deal after watching a herd of unicorns pass them by. “WeWork is part of this trend. including the ones that assumed the co-working company was worth $5 billion and $10 billion. In a February 2015 blog post.” The blame runs both ways. and Wellington Management. it can sound like investors are buying their way into value as much as buying into a trend. president of the incubator Y Combinator.wxPq6lqmb3#. But when funding comes so fast and easy and suffused with so much FOMO. but by Goldman Sachs. A startup mesmerizes investors with tales of an undiscovered market and financiers keep the company afloat until it dominates this new world.” said Sussman.BuzzFeed News public or is forced to abide by SEC standards. In theory. T. Aside from Benchmark. investors anted up on the trend with another $433 million. CEO Adam Neumann told the Wall Street Journal that “a higher valuation with more cash invested by investors just means you need to deliver higher returns.” They likely looked at shifting trends in office space — for example. he wrote. that story about the future becomes a demand from the present. simultaneously felt compelled to issue stern guidelines to startups this summer about financial “misstatements. sketching out a “grand” vision will only get a decacorn so far. Perhaps he was warning his officemates. WeWork’s recent investors are the late-stage ones Gurley warned about. these guys are trying to buy into it. The practice got so out of hand that the venture capital firm Andreessen Horowitz and Sam Altman.9/29/2016 WeWork Used These Documents To Convince Investors It's Worth Billions .” In other words. Gurley’s firm. invested in three of WeWork’s five rounds. Benchmark Capital. the other investors participating in that round were JPMorgan and Harvard’s endowment. After WeWork was marked with its $10 billion price tag. https://www. The $355 million round that WeWork picked up based on the strength of these documents was led not by Silicon Valley.

buzzfeed.dtOzbkzBPA 18/24 . 2014) https://www.com/nitashatiku/how-wework-convinced-investors-its-worth-billions?utm_term=.wxPq6lqmb3#.9/29/2016 WeWork Used These Documents To Convince Investors It's Worth Billions .BuzzFeed News WeWork Pitch Deck Wework Five-Year Forecast (October.

uber.com/nitashatiku/how-wework-convinced-investors-its-worth-billions?utm_term=.tiku@buzzfeed. compstak.BuzzFeed News WeWork Company Overview (October.dtOzbkzBPA 19/24 .buzzfeed.com. but these actors show how far theater still has to go https://www. 7 Successful Career Women Share What's Always In Their Bags Every super-successful career woman knows the key to success is being prepared for anything! See what seven real NYC girl bosses always have in their bags — and shop the video below and kate spade new york for everything a girl boss needs.wxPq6lqmb3#. Gypsy Wanted. More ▾   NEXT ON NEWS› Dee Dee Wanted Her Daughter To Be Sick. P R O M OT E D BY kate spade new york Tagged:adam neumann. real estate. 2014) Nitasha Tiku is a senior writer for BuzzFeed News and is based in San Francisco... A teenager was taken into custody Wednesday after he shot two students and one teacher at an elementary school in South Carolina. silicon valley. commercial real estate. decacorn.9/29/2016 WeWork Used These Documents To Convince Investors It's Worth Billions . Contact Nitasha Tiku at nitasha. "Hamilton" pulled back the curtain on race and Broadway. unicorn   In The News Today Donald Trump claims Google's search engine was biased in burying bad news about his rival Hillary Clinton. regus.

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