
SoftBank’s $100B fund is in a league of its own - rahulshiv
https://techcrunch.com/2017/08/09/how-softbanks-100b-fund-is-in-a-league-all-its-own/?utm_source=tcfbpage&sr_share=facebook
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d4nt
There 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
A 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
Also 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
Personal 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
...you mean the Internet of Things?

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55555
I 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]

~~~
davidreiss
> 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
> paper wealth

What wealth is not paper wealth?

~~~
codegladiator
Truck full of bananas

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maaaats
> _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.

~~~
moxious
Read "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
> new opportunities open up that no one else can compete with you on.

Would appreciate a couple of examples.

~~~
existencebox
Not a particularly _safe_ example, but Venezuela recently released 100 year
treasury bonds. I'd imagine this is not a retail investment vehicle;
traditionally.

~~~
twic
If they pay a coupon every year, and you can resell them on a market at any
time, then the fact that they won't mature for a hundred years doesn't make
them unsuitable for ordinary investors.

Now, a hundred year term deposit, with interest payable at maturity ...

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sschueller
I 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
Later 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.

~~~
pm90
This 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
I think a bigger reason is that the administrative burden of dealing with 100
startups is incredibly difficult and also would likely eat into returns.

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AJRF
"It’s neither soft nor, technically, a bank"

Jesus christ.

~~~
jasondrowley
Author of the article here. I am legitimately surprised my editor let that one
slide.

~~~
hitekker
I thought it was cute and not-at-all distracting from the substance of the
article.

Good work!

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chinathrow
$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.

~~~
csomar
So?

You are aware that these are "issues" from your "point of reference".

Someone else consider that the US has a bad human rights record. Does that
mean that he should boycott US companies/fund?

~~~
EGreg
_USA has a bad human rights record_

Compared to which other huge countries?

~~~
csomar
Don't cut the phrase. That's not what I said.

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EGreg
How does an entrepreneur get an introduction to SoftBank and pitch?

