After WeWork, SoftBank’s Startup Bookkeeping Draws Scrutiny
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Re: After WeWork, SoftBank’s Startup Bookkeeping Draws Scrutiny
#2Easy dumb money like SoftBank is the greatest enemy of innovation and progress. Just take a look at the first deck. Companies like Uber, Softbank, WeWork all having trouble with funding is an important step in our economy
Re: After WeWork, SoftBank’s Startup Bookkeeping Draws Scrutiny
#3When SoftBank buys shares in a startup and then invests again at a higher valuation, Son says he has made a profit. That is legal under accounting standards, but SoftBank receives no money. The only change is that SoftBank has boosted the value of its original stake from, say, $1 billion to $2 billion by raising the value of the startup. In SoftBank’s income statements and return calculations, at least some of the additional $1 billion can be counted as profit.
Hmmm.
Re: After WeWork, SoftBank’s Startup Bookkeeping Draws Scrutiny
#4Easy dumb money like SoftBank is the greatest enemy of innovation and progress. Just take a look at the first deck. Companies like Uber, Softbank, WeWork all having trouble with funding is an important step in our economy
On the other hand, you can think of dumb money like SoftBank as desparate money and the jobs it creates as workfare in everything but name. Lots of people who would otherwise not get the chance, are getting paid and stuffing their resumes working for these places. These doomed companies are essentially allowing investors to pay for the training of employees who will be adding value to the not-doomed companies that will come after.
Re: After WeWork, SoftBank’s Startup Bookkeeping Draws Scrutiny
#5When SoftBank buys shares in a startup and then invests again at a higher valuation, Son says he has made a profit. That is legal under accounting standards, but SoftBank receives no money. The only change is that SoftBank has boosted the value of its original stake from, say, $1 billion to $2 billion by raising the value of the startup. In SoftBank’s income statements and return calculations, at least some of the ad…
Never gets old: https://signalvnoise.com/posts/1941-press-release-37signals-...
Re: After WeWork, SoftBank’s Startup Bookkeeping Draws Scrutiny
#6Huh, who could have seen this coming.
Re: After WeWork, SoftBank’s Startup Bookkeeping Draws Scrutiny
#7Is there a non-paywalled version?
Re: After WeWork, SoftBank’s Startup Bookkeeping Draws Scrutiny
#8The more I hear about this the more it looks like this entire scheme has turned into a pyramid scheme. Pouring more money into investments to try and boost the valuation. Using previous investments to invest and boost the value of new investments, guaranteeing massive loans in order to get others to invest at huge valuations. It just looks more and more like laundering money through all sorts of different mechanisms to create paper gains that don't reflect reality.
The interesting point though is that this is basically all being done using money that private investors have given, so really there's no public accountability or outrage. The question is whether the investors in the vision fund start asking to open the books and check the valuations themselves. If they don't then this will just continue until Masayoshi finds a way of getting his hands on and even bigger pile of money in order to continue to cover up the dodgy valuations - because that's what you'd have to do right? You'd have to do another massive fund to have enough cash to continue driving up these valuations? You would want another massive fund raised quickly before the existing investments start fallling apart.
I wonder what Masayoshi is doing these days.
Re: After WeWork, SoftBank’s Startup Bookkeeping Draws Scrutiny
#9[deleted]
Re: After WeWork, SoftBank’s Startup Bookkeeping Draws Scrutiny
#10When SoftBank buys shares in a startup and then invests again at a higher valuation, Son says he has made a profit. That is legal under accounting standards, but SoftBank receives no money. The only change is that SoftBank has boosted the value of its original stake from, say, $1 billion to $2 billion by raising the value of the startup. In SoftBank’s income statements and return calculations, at least some of the ad…
Never gets old: https://signalvnoise.com/posts/1941-press-release-37signals-...
Thanks. It's fun.