As SoftBank readies its earnings, all eyes are on Vision Fund 2
SoftBank Group reports its earnings Wednesday, which is a bit like hosting a dinner party when your kids have the flu and your kitchen is being remodeled.
Between the lines: Pay most attention to fundraising progress, or lack thereof, for SoftBank's next Vision Fund. Pay less attention to portfolio markups/markdowns, outside of how it may affect potential LP sentiment.
The backdrop: SoftBank announced in July that it had $108 billion in commitments for Vision Fund 2 but, as we reported at the time, those weren't really commitments. They were non-binding memorandums of understanding.
There's an FT report that SoftBank will insist on stronger governance controls at portfolio companies, although that feels like a pretty empty threat.
- Would SoftBank really deny follow-on funds to an existing investment in need, thus threatening existing value?
- And given its demonstrated willingness to turn on a founding CEO, how would it sell this to prospective investees?
- Maybe it's just a Saudi sales pitch.
The bottom line: Vision Fund is larger than all Silicon Valley venture capital funds put together, so the existence/disappearance of Vision Fund 2 will have an earthquake-like impact on the future funding environment.