SoftBank is suing portfolio company IRL after it admitted 95% of its users were fake. VCs are stressing the need for ‘uncomfortable’ due diligence
SoftBank is suing portfolio company IRL after it admitted 95% of its users were fake. VCs are stressing the need for ‘uncomfortable’ due diligence::undefined
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https://www.forbes.com/sites/abrambrown/2021/06/15/social-messaging-app-irl-gets-11-billion-valuation-from-softbank-plots-monetization/
"If you’re a teen in America, then you probably are familiar with a messaging app called IRL. The rest of you likely are not—aside from some big name tech investors keen to shower the startup with a large new funding round."
Even the journalist believed the lie. Nobody checked with the teens!
How is it uncomfortable verifying how many customers you have? As someone who works in the legal sector I am staggered by how many anyone nebulous software companies are bought without the buyer conducting minimal due diligence like a review of the top 20 customers.
I’ll be blunt: if a large bank is stupid enough to invest money in a company that’s basically vaporware, and they invest because they were far too lazy to do any real due diligence, that’s on the bank.
Just to clarify, SoftBank is not a bank.
Just to clarify: a "commercial bank" is like Bank of America, or Wells Fargo.
An "investment bank" is like... Softbank. They pool money together of the rich and they all make massive bets on companies with their pooled money.
That just makes it worse and totally deserved.
"You had one fucking job!"
Softbank's explicit strategy on their "Vision Fund" was to bankroll their investments with so much money, that all other competitors lost.
Its harmful to our economy and people need to recognize how targeted and how much of a dick-move this was for the last 10 years.
Yeah, they make Link Amps
It’s never a bad day when tech VCs lose money
But they still get a bail out
SoftBank is astoundingly bad at this. This is the same company that acquired Sprint, among other bad decisions. Last fall they were happy that they only lost $6 Billion in the quarter because they'd lost $10B the previous quarter. The financial system is really fucked up when companies like this just stay in business despite this type of incompetence.
This is literally the GoJo plot in Succession lmao
That’s because it keeps happening in real life