Softbank Vision Fund: What you need to know

Venture Capitalists can make you dreams come true as a prospective entrepreneur. How different is SoftBank? Read on..

Enter SoftBank

The world of startups is full of pitfalls, but also filled with investors looking to help fund the next big thing. Over the last decade, a whole economy has been created around it – an economy that has produced many successful gadgets, but also many outright failures.

Softbank is one of the biggest players in this economy, its Vision Fund is one of the most coveted funding sources for startups.

The sheer size of the fund, valued at $100 billion, is said to be disrupting the whole venture capital industry by raising the prices on companies and investments. As such, it’s one of the big hitters these days, yet it’s difficult to understand just why it is so important.

Why is it necessary?

Startup companies, particularly in tech, often face a huge problem from the get-go: funding. It used to be, decades ago, that you could start producing whatever widget you wanted by hand, sell it locally, and slowly expand.

That won’t work today.

The global economy has shifted, and today, success in tech often requires having a wide reach and mass production. This means that any new venture needs prohibitive amounts of money to begin with, amounts of money regular people don’t really have.

Does it just give you money?

Of course not. While Vision Fund’s funds are big, it isn’t bottomless – and they aren’t a gift, either.

Vision Fund is an investment program, its core philosophy being that it’ll give entrepreneurs the money they need so they can focus on building a successful company without the financial issues they’d otherwise face.

Softbank is known for being a permissive investor, but it’s still a capitalist undertaking – which means a profit is eventually required.

Moreover, Softbank will naturally be entitled to a share of whatever profit your company makes.

You could, therefore, see this funding as a loan of sorts.

What if no profits are made?

One of the big problems of venture capitals is that many companies indeed never make a profit. This is pretty common when companies try to fix problems that aren’t there, thus failing to find a market.

The Venture Capital world is full of poorly planned, ill-conceived gadgets somebody somehow thought were the next big thing that led to millions of dollars wasted.

In theory, investors review proposals and choose those that are the most likely to succeed and help change our world.

In truth, venture capitals are often seen as a way for certain individuals to promise investors everything, deliver nothing, and live like millionaires.

Softbank’s Vision Fund, however, has a method to try and stop this.

Fighting mismanagement with clauses

As usual with venture capital contracts, if your project doesn’t take off, the investors lose their money. That’s also true of Softbank’s fund, and whatever money was spent on getting the company off the ground will be lost.

Just as well, if the company turns a profit first, then it stops doing so, the fund itself will take the hit.

That is true, however, only for the money that was actually spent on the company.

Softbank’s Vision Fund has a peculiar clause that hopes to fight against venture capital scammers, those who live like millionaires on investor money and then return nothing.

Money spent on management salaries and bonuses can be taken back if the company fails.This doesn’t only extend to the initial investment, but also earnings.

Earnings are divided between the company and Softbank, but if the company stop earning any money soon, managers are expected to pay back a part of the money they took to Softbank.

This makes keeping the company efficient a priority above all things, since results are not just encouraged but expected.

Is this really changing the landscape?

It’s still early to tell. Softbank works in a different way from other funds, since it requires entrepreneurs to have some skin in the game. They’ll fund projects, but they don’t take the full cost of a failure – meaning companies receiving funds need to plan around the idea of having to pay back a part of it.

While the logic is sound, it also means only people who can take a risk can participate – thus thinning the eligible startups and offering the services mostly to people who already have means to begin with and who can take the brunt of failure.

Still, in a world where venture capital is a thing, Softbank Vision Fund has caught many eyes and helped many companies, even when their tactics and clauses are often reviled by others.

Conclusion

The emergence of venture capitalists like SoftBank really makes the difference. With funding that can bring the entrepreneurs dream to reality, it is world heralding.

Why Supporting a Local Economy is a Boost For Entrepreneurial Efforts

The gateway to business expansion is securing patronage. A local business has a chance to succeed when its goods and services receive local attention.

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Local business will always get a boost when organizations and individuals patronize such enterprises.

When you realize that many businesses are family-owned around southern Indiana like most parts of the world, then you can begin to give a thought to the impact of such enterprises on local economies.

Every business that employs one or more persons can be seen to be supportive of the local economy considering that they provide a means of gainful employment to such individuals.

Boost to Local Economy

When the factors of production such as land and finance, manpower are engaged, invariably, there is a boost to the local economy as there is added activity, increased aggregate turnover in the particular sectors amongst other considerations.

When you patronize the products of a commercial roofing company around you, you are providing an avenue for the tax revenues to be boosted and for the company to grow or expand its turnover.

Contribution to a Healthy Society

The patronage of a local business will enable such enterprise to employ more people.

And when this happens, more persons are given the opportunity to boost their personal economy, attend to personal needs and bolster the aggregate wellbeing of the community.

The quality of life in such places also receives a boost with more funds made available through patronage of local goods.

Helping the Social Good

The social good gets a boost when more people are employed; local companies pay steady taxes and meet their obligations or attend to corporate social responsibility.

The patronage of metal roofing products made in your community could mean an increase in what such an enterprise can undertake for its local community.

whether this means expansion of the local park or provision of scholarships for higher education, such an effort is worthwhile.

Contributing to a Richer Nation

The Gross Domestic Product of any is the aggregate of the output within the local economy and with more generation of turnover there is an increase in this value.

Patronizing local products within your region means that on the whole, the state’s GDP will be boosted by the margin of that patronage.

So, the riches of the state gets a boost with efforts made to encourage production through buying local.

Better Employment Data

Buying local helps to keep the enterprise in operation and this helps in no mean way to ensure that there is a boost in the number of employed persons around such community.

Whether the local business is into cottage operations or such technological advanced processes as production of tapered insulation system components, the overall effect is laudable.

The basis for patronage of local businesses is well grounded and is the reason for such widespread legislations seen across several countries.

Patronage opens the door for business growth, funding expansion and development of new product lines.