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SoftBank’s $100B fund is in a league of its own
- sschueller 9y agoI find it amazing and absurd to see how so much money is invested in such a short amount of time. Sadly from what I understand most of it will go towards later stages. I would like to see this kind of money made available to early stage new ideas that need a lot of capital to get of the ground.
- moxious 9y agoLater stage ideas always get more money, this is rational and should stay that way. Later stage companies are bigger and more complex, and having de-risked the basics, are more apt to build huge things like new factories. They'll have hundreds or thousands of employees, and the need to acquire much larger scale in order to continue growing. By contrast, small companies can do really well with much less capital, because they're trying to do smaller things (hire 12 people, not 1,200) and they need to do more basic things to de-risk their ideas. Consider: $100 million could more than adequately seed 100 early stage companies, but it wouldn't be enough to build a single factory in some places.
- Retric 9y agoYou also get far less dilution if you take 1 million > grow > 9 million > grow > 90 million. Vs just taking 100 million when your company is wort ~.5 to 5 million.
- pm90 9y agoThis is a good point, but I wonder if the parent wasn't talking specifically of making $100 million available to one startup, but $1 million per startup. One could fund a lot more ideas that way, and odds are that one of them would be a unicorn. The only reason why that's not really happening seems to me that we either don't have that many ideas or that much people willing to work on those ideas.
- whatok 9y agoI think a bigger reason is that the administrative burden of dealing with 100 startups is incredibly difficult and also would likely eat into returns.
- GrumpyNl 9y agoAlways ask, did they invest hard cash or did they invest with crypto and that has the value of 100B?
- maaaats 9y ago> in the interest of furthering his 300-year plan to build the largest company on the planet At least they are not just looking for short-term and short-sighted profits, but that's a looong time.
- chii 9y agowhen you invest with a 300 year plan, it means it will be sustainable. Potentially a better way to invest than profit every quarter anyway...
- moxious 9y agoRead "Pioneering Portfolio Management" by David Swenson, the guy who runs the Yale endowment. Fascinating book on investing; one of his "super powers" as an investor is the fact that the Yale Endowment is immortal, and can invest on 100 year timelines. The rest of us who need to retire can't afford to think like that. But if you can afford to think like that, new opportunities open up that no one else can compete with you on. And that time perspective makes issues like the dot-com crash or the 2009 financial crisis look laughably irrelevant. If you zoom out the performance graph to the entire history of the US stock market, the great depression looks a bit more like a temporary downturn, whose total value is a small percentage relative to today's current level.
- 11thEarlOfMar 9y ago> new opportunities open up that no one else can compete with you on. Would appreciate a couple of examples.
- existencebox 9y agoNot a particularly _safe_ example, but Venezuela recently released 100 year treasury bonds. I'd imagine this is not a retail investment vehicle; traditionally.
- amitagrawal 9y ago
- chinathrow 9y ago$60B of the $100B number is from countries (Saudi Arabia, Abu Dhabi) where human rights issues are still a big thing these days. Maybe we can think about that whenever we see where SoftBanks new fund is invested in - it's 60% money from folks which do not care much about some basic human rights.
- sschueller 9y agoSame goes for Uber [1]. Something to think about next time one orders one. [1] https://www.nytimes.com/2016/06/02/technology/uber-investment-saudi-arabia.html https://www.nytimes.com/2016/06/02/technology/uber-investmen...
- zajd 9y agoGotta love hn where human rights concerns get downvoted, top voted comment? look how rich this guy is
- 55555 9y agoI thought that Masayoshi Son's Wikipedia intro was interesting: > Masayoshi Son (Japanese: 孫 正義 Hepburn: Son Masayoshi, Korean: 손정의 Son Jeong-ui; born August 11, 1957) is a Korean-descendant (Zainichi Korean) Japanese businessman and the founder and current chief executive officer of SoftBank, the chief executive officer of SoftBank Mobile, and current chairman of Sprint Corporation. According to Forbes magazine, Son's estimated net worth is US $20.4 billion and he is the richest man in Japan,[2] despite having the distinction of losing the most money in history (approximately $70bn during the dot com crash of 2000).[3]
- shawnps 9y agoIf you found the part that he's Zainichi interesting, there is a whole history to Koreans in Japan that I didn't know much about until a couple years into living in Tokyo. More here https://en.wikipedia.org/wiki/Koreans_in_Japan https://en.wikipedia.org/wiki/Koreans_in_Japan
- davidreiss 9y ago> despite having the distinction of losing the most money in history (approximately $70bn during the dot com crash of 2000).[3] He didn't lose $70B. His net worth dropped $70B because of short term stock fluctuations during the dotcom collapse. He never had $70B to lose. It was all paper wealth tied to the market valuations of his companies. A subtle but important distinction.
- soared 9y ago> paper wealth What wealth is not paper wealth?
- codegladiator 9y agoTruck full of bananas
- uiri 9y agoI found this gem in the source for the $70bn loss figure: By the way, the chance of AOL buying Yahoo is next to never. It is kind of ironic given the Verizon deal which merged it with AOL. https://dealbook.nytimes.com/2010/12/13/a-key-figure-in-the-future-of-yahoo/ https://dealbook.nytimes.com/2010/12/13/a-key-figure-in-the-... The $70bn appears to have been in the value of SoftBank stock he held during the crash. I'm not sure when SoftBank IPO'd but if it was after the crash then it truly is paper losses. Otherwise, he had the opportunity to cash out.
- AJRF 9y ago"It’s neither soft nor, technically, a bank" Jesus christ.
- jasondrowley 9y agoAuthor of the article here. I am legitimately surprised my editor let that one slide.
- d4nt 9y agoThere are some very rich people out there deciding to move their money into tech. I wonder what's prompting that decision. Random theories: 1. Big Oil is done. Battery prices have hit the tipping point and all cars will soon be electric. The traditional car companies are risky too, at least until the disruption ends and we can see who'll survive. 2. Banks haven't fixed anything, so the smart money is avoiding them. 3. They see no growth in consumer retail now that the cheap Chinese goods boom is over.
- mdorazio 9y agoA couple more for you: 4. Interest rates have been effectively zero for nearly a decade, making borrowing money cheap and also making getting a decent guaranteed return on your money hard. The net result is more speculation in riskier markets like tech VC. 5. If you're looking for outsized returns, there are few industries outside tech where this is a real possibility these days, compared to in the past.
- jacobr1 9y agoAlso 5B - to the extent there is innovation outside "pure tech," it is probably being sold as a tech play. Ag-Tech, Fin-Tech, etc ... Consumer-tech is already just tech, as is enterprise-tech, industrial-tech. With the disintermediation of vertical supply chains, any supplier of technical innovation is a "tech" company. Tech companies operate in nearly all industries.
- abakker 9y agoPersonal Theory: The boom of tech in the "knowledge work" era has pretty much stagnated, but we're deep in the very promising world of merging digital and physical world via sensors, drones, self driving/autonomous vehicles, and AR/VR. A lot of the business that gets most effected by the physical world stuff has been the least touched by the knowledge worker focused stuff (Cloud, apps, etc.)
- frandroid 9y ago
- EGreg 9y agoHow does an entrepreneur get an introduction to SoftBank and pitch?