It would seem that softbanks backing by the Saudi brutal regime should give Silicon Valley idealistic founders moment of pause before accepting their investment.
WeWork founders banned meat from their office meals can they really accept to be owned by this fund?
Once the SoftBank money stops flowing does the chamath described Ponzi scheme stop causing the whole thing Venture backed growth story to unravel?
I watched the whole Chamath talk you linked and I'm not sure I'm entirely convinced. Every couple of years there is a guy like him yelling that this is all a big ponzi scheme about to collapse.
But Softbank is a poor example given how the invest almost entirely in late stage companies, mostly with real profitable business models, who would otherwise easily find plenty of funding in traditional less risky capital markets (who don't share the same critique but push the same never-ending growth pressure and often far worse backroom financial trickery).
This is very distinct from the dotcom boom... or you know acutal Ponzi schemes... which were entities which raised countless millions on zero-value organizations. He's probably right in some ways but lost me in his exaggerated/radical positioning which he seems fond of.
Acknowledged and true that there is always someone with a contrarian pessimistic view. Chamath seems bent on "burning it down" after his own firm went through what objectively looks like a meltdown.
Also true that later stage companies have working business models (though they are typically not profitable a tradeoff they willingly make for growth). See the comment above on plenty of funding post SoftBank round. I've also observed that their valuation forces founders to do subsequent down rounds.
The Ponzi scheme argument (not perfect) is the gains are all paper valuations that are based on growth continuing or more investment being piled in. Once that stops the whole thing crumbles. After Softbank with a $100B fund, where else does the funding come from? IPO?
Once the SoftBank money stops flowing does the chamath described Ponzi scheme stop causing the whole thing Venture backed growth story to unravel?
Hmm, so should we call this sort of thing a "Ponzi Scheme" or a "money laundering scheme"? That is given that Softbank is a way to recycle the Saudi Billions while other schemes involve Russia oligarchs or Chinese money itching to leave it's homeland?
The Saudis don't require a means to recycle - launder - their money. Nearly the entire world will accept their money, no questions asked.
Saudi Arabia's only serious pressing concern economically, is building a non-oil-based, sustainable economy before the oil growth era stagnates or reverses course. They have rapid population growth (50% in 15 years), the clock is ticking against their ability to sustain a future with 50 or 60 million people.
It's not enough to just replace oil in the equation as it is today for their economy, they have to figure out how to do it for twice as many people. They need to figure out how to build out a $1.5 trillion non-oil economy within 30 or 40 years.
Compounded by the fact that almost their entire population lives of off generous government subsidies. Will be tough to instill an entrepreneurial spirit in the next generation.
One could say that the Saudis have moved on from spreading wahhabism and funding terrorists as well, regretted their mistakes spreading an intolerant ideology, and are now much nicer.
But I guess the kingdom is still permeated with Sunni Islam and they are willing to bomb the crap out of Yemen so it won’t fall into Shiite Houthis’ hands.
> One could say that the Saudis have moved on from spreading wahhabism and funding terrorists as well, regretted their mistakes spreading an intolerant ideology, and are now much nicer.
They executed an American permanent resident journalist, Jamal Khashoggi, in one of their consulates on foreign soil within the last two weeks, and failed at the cover up [1].
WeWork founders banned meat from their office meals can they really accept to be owned by this fund?
Once the SoftBank money stops flowing does the chamath described Ponzi scheme stop causing the whole thing Venture backed growth story to unravel?
https://www.businessinsider.com/softbank-talks-invest-15-bil...
https://m.youtube.com/watch?v=RwRZtZQoLtQ