WeWork Adds to Venture Capital’s High-Profile Bankruptcy Busts

WeWork’s Chapter 11 filing adds to a growing list of venture-capital favorites that have gone bankrupt, giving investment firms a fresh reason to more thoroughly vet companies before pouring money into them.

WeWork’s downfall follows other major VC-backed failures, including those of FTX, BlockFi Inc. and Vice Media LLC. Those setbacks will spur venture capital firms to take more time for due diligence before investing, some observers say.

“Theranos, FTX, now WeWork have made VCs realize that they need to be careful to not get distracted by an audacious founder with an audacious story,” Erik Gordon, a professor at the ...