A few thoughts:
· Visionary / controversial founder with aggressive plan to build the largest internet / technology investing firm across the world
· Using a platform or a “family” approach with portfolio companies in order to leverage learnings to scale businesses
· Rolling out potentially successful business models in the U.S. and Europe across the world at an incredibly rapid pace
· Top talent from consulting, banking, MBA´s and big tech flocking to backed companies
· VC´s scared to invest in any competitor of backed companies out of fear of their unlimited access to capital
· Companies focused on growth (not profitability), in most cases operating at large burn rates with a plan for winning market share
Depending on the year, you could interchange Rocket Internet (2011-2013) and Softbank (now) for the statements above. I know these are overly simplistic and there are real differences between the two models, but some things do rhyme.
However, the Softbank model seems to be stronger in a number of ways:
· Significantly more assets to invest (hundreds of billions) – ability to win the best deals in the planet - question of price is for another time
· Investor approach rather than incubator – this keeps founders more aligned, with higher % of equity and motivated for the long term within portfolio companies
· Invest into the global leader and take that knowledge to their expansion
· Broader approach to invest in all industries and markets worldwide (including China & US)
· High commitment. Take large % of the companies in portfolio through primary + secondary structures
Today, it is easy to criticize the Softbank model given the tough year that they have had. The same way the Rocket Internet model was bashed initially with early failures. However, I believe the combination of capital, big visions, smart people and execution has proven to be successful over time.
Just like most all VC funds, the losers will appear early and the winners will take time to marinate. The same could be the case for the Vision / Innovation funds. If you look at the 90+ companies in the SB portfolio, you can clearly see that there are some high potential winners. Only time will tell, but they have had a great pick at the top.
I am personally rooting for Softbank to be successful, especially as they continue to back large visions and entrepreneurs to make the world better through technology. Even if the firm is not successful for whatever reason, their investments in talent & technology will be a catalyst for future entrepreneurs for years to come.
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