Some in the venture industry blame the Vision Fund for valuation spikes and startups' spiraling losses. Others applaud what it's done.
Some in the industry blame the fund for inflating startup values and funding rounds; encouraging founders to focus on growth and ignore costs and losses, no matter how big; and setting off an unhealthy arms race in the venture capital world as firms raise ever larger funds.
But one thing Silicon Valley's investment luminaries can't agree on is what to make of SoftBank, the Japanese tech mega-fund that landed in their midst three years ago. Now the debate is coming to a head, as two of SoftBank's biggest bets — Uber and WeWork — teeter on shaky ground, and as SoftBank plows ahead with plans to raise a second $100 billion Vision Fund. For tech VCs and founders, it's a proof-point moment that will put the SoftBank model to test, for better or for worse, and help Silicon Valley come to terms with its ultimate impact.
Part of SoftBank's detrimental impact involves its role encouraging startups and founders to focus on growth and not concern themselves with costs or the bottom line, Bohlen and others argue. That dynamic is most obvious at WeWork, which has been bleeding billions of dollars in cash amid its worldwide expansion and hasOne of the Vision Fund's biggest investments has been in WeWork run by CEO Adam Neumann.
In some cases, the Vision Fund seems to be trying to prematurely anoint a winner in particular markets, venture sources said. That seemed to be the case in the app-based dog-walking business, Murphy said.invested $300 million in its competitor, Wag
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