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Illustration: Aïda Amer/Axios

WeWork last night made it official: SoftBank will pump $9.5 billion into the beleaguered company, including a $3 billion stock tender, $5 billion of new debt, and $1.5 billion that is being accelerated from an existing equity commitment.

The big picture: There's been lots of talk of how this mess will impact startup valuations, business models, and IPO opportunities. But far too little on how it should impact board oversight and founder control.

  • Remember, SoftBank had two directors on the WeWork board. But then decided, more than a year later, that it had to bring in Marcelo Claure to figure out what was really going on. What were those directors doing all this time?
  • The board either wasn't paying attention, or was paying attention but powerless to fix problems before it was too late. And, if the latter is true, then what was the point of having a board in the first place? Optics?

The state of play: Under the new deal, SoftBank will hold an 80% stake in WeWork on a fully-diluted basis, but apparently will not have a majority of votes on the to-be-expanded board. As such, SoftBank is claiming it does not control WeWork.

But, but, but: When I spoke to an internal WeWork spokesperson today, she directed most questions about future board structure, appointments, etc. to SoftBank.

  • The press release does not make any reference to the Adam Neumann payoff, perhaps to avoid rubbing further salt in employee wounds.
  • My understanding of the tender is that all company shareholders, including both employees and investors, can tender up to 33% of their shares at $19.19 each. Were more than $3 billion to be tendered, it's likely that the company would reduce payoffs on a pro rata basis.
  • That scenario could be impacted by how much Neumann himself tenders, as he's eligible to reap more than $900 million.

The bottom line: Venture capital has spent more than a decade bending over backwards to appease founders, often with positive results. But along the way they've too often abdicated fiduciary obligations to limited partners, believing that their job ends at "making the deal" and then "helping out when needed," such as with introductions to potential new hires.

  • Investors can be founder-friendly while still packing some emergency parachutes into term sheets. And if an entrepreneur objects to even the loosest of restraints, then maybe it's not a deal worth winning.

Go deeper: How SoftBank plans to save WeWork

Go deeper

4 hours ago - Health

Axios AM Deep Dive: Covid forever

Illustration: Aïda Amer/Axios

It was 563 days ago that the WHO declared Covid-19 a pandemic. This Axios AM Deep Dive, led by healthcare reporter Caitlin Owens, looks at our Covid future.

Federal judge blocks vaccine mandate for NYC teachers

Students are dismissed from the first day of school at PS 133 in Brooklyn on Sept. 13. Photo: Michael Nagle/Xinhua via Getty Images

A federal appeals court judge on Friday temporarily blocked New York City schools from enforcing a vaccine mandate for school employees, days before it was set to take effect, AP reports.

Driving the news: The vaccine mandate was set to begin on Monday, prompting concerns over staffing shortages in schools across the nation's largest school system.

CCP releases two jailed Canadians after Huawei CFO deal with DOJ

Photo: Sheldon Cooper/SOPA Images/LightRocket via Getty Images

Two Canadians imprisoned by the Chinese government for over 1,000 days have been released and are expected to arrive in Canada on Saturday, Prime Minister Justin Trudeau said Friday.

Why it matters: Their release comes hours after Huawei Technologies CFO Meng Wanzhou reached a deal with the U.S. Department of Justice that resolves the criminal charges against her and could pave the way for her to return to China.