Venture financiers aren’t supposed to make their portfolio fellowships duel to the death. There’s a long-standing but unofficial principle that investors shouldn’t fund several opponents in the same space. Conflicts in the best interests could develop, information about one startup’s strategy could be improperly shared with the other, and the companies could become questionable of admonition provided by their investors. That should contribute to questions down the line for VCs, as founders may avoid them if they fear the conglomerate might money their competitor down the line.
SoftBank shatters that standard with its juggernaut $100 billion Vision Fund plus its Innovation Fund. The investor hasn’t been shy about funding variou features of the same fight.
The problem is that SoftBank’s power wrings the market dynamics. Startups might take exploitative slews from the house under the threat that they’ll be outspent whoever is willing to take the word sheet. That can hurt works, especially ones joining later, who might have a reduced chance for a meaningful departure. SoftBank could preach for consolidations, buys, or concoction differentiation that boost its odds of collecting a fate at the expense of the startups’ potential.
Read more: techcrunch.com.