By Joshua Franklin and Greg Roumeliotis
NEW YORK (Reuters) - WeWork co-founder Adam Neumann has started talks with board directors and investors to discuss his future role at the U.S. office-sharing start-up, including the possibility of giving up his title as chief executive, people familiar with the matter said on Monday.
Neumann has not yet agreed to step aside as CEO of WeWork parent We Company, and there is no certainty he will do so, the sources said. However, a board challenge planned by investors, including SoftBank Group Corp and Benchmark Capital, has been put on hold until these discussions produce an outcome, the sources added.
Were the talks with Neumann to lead to a resolution, they could avert a showdown between SoftBank and one of its biggest investments. We Company postponed its initial public offering last week following push-back from perspective investors, not just over its widening losses, but also over Neumann's unusually firm grip on the company.
This was a blow for SoftBank, which was hoping for We Company's IPO to bolster its fortunes as it seeks to woo investors for its second $108 billion Vision Fund. It invested in We Company at a $47 billion valuation in January.
But investor skepticism led to the start-up considering a potential IPO valuation earlier this month of as low as $10 billion, Reuters reported.
One possibility that Neumann is discussing is transitioning to a chairman role, the sources said. Details of the discussions and what Neumann would request in exchange for giving up his CEO title could not be learned.
Another option would be for Neumann to remain as CEO, with an independent chairman brought in to join the board, according to one of the sources.
Were Neumann to agree to a leadership transition, it would make it unlikely that We Company can proceed with its plans to complete an initial public offering by the end of the year. This would mean it would have replace a $6 billion debt deal it reached with banks this summer that is contingent on the start-up going public.
We Company is considering slowing its expansion so it burns through less cash and would therefore require less funding in the absence of an IPO in the near team, one of the sources said.
The sources asked not to be identified because the matter is confidential. WeWork and SoftBank declined to comment. Neumann and Benchmark Capital did not immediately respond to requests for comment.
As co-founder of We Company, Neumann holds special voting shares that enable him to dismiss dissident board directors and shoot down any challenge to his authority.