SoftBank’s Masayoshi Son Speaks to an Almost Empty Room at Saudi Summit
bloomberg.com
bloomberg.com
Program: https://futureinvestmentinitiative.com/en/programs/solving-t...
Video: https://www.youtube.com/watch?v=2UWx1hbhpOU&feature=youtu.be...
"Watch Softbank chief Masayoshi Son fall asleep during a panel at the Future Investment Initiative in Saudi yesterday..."
>Urgent questions? What frameworks for collaboration between corporations and startups will drive these technologies from ideation to commercialization? How will investors spot keystone technologies with the potential to address large-scale global challenges?
I can kind of understand that
I imagine a lot of the attendees figured they were better off networking than watching the discussions.
That is, when you're sitting on $100 billion dollars, you're going to spend it, even if to grifters like Adam Neumann. I think more folks are coming to the realization that there is just too much money chasing to few deals, and more money isn't the solution.
I hope the US creates a sovereign wealth fund. Not only would it likely make raising money more meritocratic but it would likely make a bunch of the low to mid tier VC firms go away.
Umm, and where would that "wealth" come from?? The US national debt is over 22 trillion dollars.
You could do something like that, but broaden the requirements to include all tech (not just science or high tech), and take equity.
The gov't would also be in a much better position to hire scouts across the country, hence democratizing access to funding.
That doesn't change the parent's point about the U.S. government not having money for such a fund.
(Nor, do I think should it have such a fund. If the government were to have extra money -- and it doesn't -- the government should lower its taxes.)
In the case of Norway's sovereign fund (the biggest I think) there's a very good reason for it to exist. The fund inflows are the result of extracting oil from the ground so from the accounting point of view those are not revenues. They're movements in the balance sheet, converting one asset (oil) into another asset (cash). So they then put that in a fund and spend the returns, funding expenses with actual revenues. If they were to spend the capital they would be funding current expenses from assets. The equivalent in the US would be to every year sell a part of the national parks and use that money for tax breaks.
Regardless of whether you think that's a good or bad thing, it's certainly very far from the U.S. situation.
> those are not revenues. They're movements in the balance sheet, converting one asset (oil) into another asset (cash)'
Though it doesn't invalidate your point, I do not think it means what you think it means.
Revenue: The income generated from sale of goods or services, or any other use of capital or assets
In usual accounting terms revenue has clear rules. If you sell long-term assets for the same value you had on your balance sheet already you record nothing in your income statement. You only record a gain or loss if the sale value is different from the book value, and even that goes straight to the bottom line and is not top-line revenue. Norway's oil is a long-term asset so converting it to cash is not revenue in the normal accounting sense.
Yes that is the closest parallel.
Though in the long-term it's all relative; funding is funding. The U.S. could sell its national assets to lower tax burden. Norway could sell its national assets to lower tax burden.
Or, instead of lowering the amount taxed, they could use those assets to fund a sovereign wealth fund for government benefits.
Both options are equally easy for the state to do, of course. The point is there's a sound argument for doing the fund when you have such a large asset that's otherwise useless to you, instead of returning the money as lower taxes. If you do the fund you're setting up your economy to be able to depend on the revenues from the fund forever as you are not depleting the capital. If you lower taxes you get an economy using asset sales to fund current expenses. Once those assets run out you get to deal with that somehow to go back to a balanced budget. Since most states tax incomes much more than wealth doing that would basically mean the current generation living large and passing on the problem to their children to solve. Which is effectively what is happening in a lot of the oil rich countries.
VCs invest in startups for commercial viability.
I hope you’re somewhere you don’t do your own taxes.
https://www.brookings.edu/blog/up-front/2019/06/25/six-facts...
> sovereign wealth fund
No one is passing about a cup.
A sovereign wealth fund is owned by the state.
A private wealth fund is owned by people and corporation; e.g. "households".
https://www.pewresearch.org/fact-tank/2019/07/24/facts-about...
https://www.forbes.com/sites/markcancian/2019/08/03/goodbye-...
> Umm, and where would that "wealth" come from?? The US national debt is over 22 trillion dollars.
By issuing more debt. Debt isn't always a bad thing, especially when it results in an even larger amount of revenue. That's partially why looking at the 22 trillion debt figure in a vacuum is almost meaningless. Looking at the change over time of the debt/GDP ratio will give you a much fuller picture.
Now with that being said, I'm against the idea of a US-based sovereign wealth fund. But it wouldn't be unprecedented at all. EDIT: I think I can see a sovereign "strategic initiative", like something to ensure semiconductor dominance, or other forms of technological innovations. But not necessarily for the purpose of making money like a sovereign wealth fund would try to do.
USA should definitely fund research and providing infrastructure, and maybe even subsidize a company or two. But I'm not sure if the USA wants to be the owners of many companies in the market.
It also means that you need to spend a lot of time obtaining funds because it is not a competitive advantage anymore, it's a requirement.
The only difference is, the US government doesn't take equity, and thank goodness for that. Imagine a political appointee on the board of every new technology company.
I’m uncertain about this. Clearly , not having money is bad but is too much money in the hands of founders really good?
I don't know enough about Adam Neumann to say, and the current media environment for him is too negative for me to get an unbiased opinion. Maybe he was always going to be an unwise investment. But it is just possible that he (and Uber, and Lyft, and Peloton, and...) would have built productive, profitable companies if they had not felt they had to somehow justify being given 10x the amount of money they deserved.
[1] https://techcrunch.com/2019/10/24/softbank-notes-it-has-now-...
I'm as skeptical of the vision fund as anyone. But it's pretty impressive to go from nothing to the richest person in the world. Lose the most money in history (still being a multi-billionaire, though), and in the span of 20 years, 10x your fortune AGAIN -- to be again one of the richest people in the world.
If anything, that's an impressive story -- at least to me.
https://www.npr.org/templates/transcript/transcript.php?stor...
He's showing signs of making some of the losses back already: https://www.reuters.com/article/us-bytedance-ipo-breakingvie...
I wouldn't write him off just because he got a little conned on WeWork.
I would not invest in the Chinese government, and therefore would not invest in a large Chinese company since they are two sides of the same coin. Not only out of morality, but because I don't want to expose myself to financial risk by betting on a communist government/dictatorship not to fuck me.
Understated.
But I agree.
I'm not able to believe a guy with Son's record gets conned by WeWork. I'd say Son was trying to con others, but got caught holding the bag.
On the surface Nuro looks cool but now it makes you second guess knowing SB invested $1B in them...
Does this Softbank/WeWork unraveling make you nervous about the whole Silicon Valley system unzipping too? (Vote Below)